Florida Senate - 2010                       CS for CS for SB 876 
 
By the Committees on General Government Appropriations; and 
Banking and Insurance; and Senators Bennett, Dockery, and Hill 
601-04794-10                                           2010876c2 
1                        A bill to be entitled 
2         An act relating to residential property insurance; 
3         amending s. 627.062, F.S.; authorizing certain 
4         insurers to use a rate different from otherwise 
5         applicable filed rates; prohibiting the consideration 
6         of certain policies when making a specified 
7         calculation; limiting the maximum average statewide 
8         increase for certain rate filings; preserving the 
9         authority of the Office of Insurance Regulation to 
10         disapprove rates as inadequate or disapprove a rate 
11         filing for using certain rating factors; authorizing 
12         the office to direct an insurer to make a specified 
13         type of rate filing under certain circumstances; 
14         amending s. 627.351, F.S.; providing requirements for 
15         the levy of the Citizens policyholder surcharge; 
16         prohibiting the corporation from levying certain 
17         regular assessments until after levying the full 
18         amount of a Citizens policyholder surcharge; requiring 
19         the corporation’s plan of operation to require agents 
20         to obtain an acknowledgement of potential surcharge 
21         and assessment liability from applicants and 
22         policyholders; requiring the corporation to 
23         permanently retain a copy of such acknowledgments; 
24         specifying that the acknowledgement creates a 
25         conclusive presumption of understanding and acceptance 
26         by the policyholder; creating s. 627.7031, F.S.; 
27         authorizing certain insurers to offer or renew 
28         policies at rates established under certain 
29         circumstances; prohibiting certain insurers from 
30         purchasing TICL option coverage from the Florida 
31         Hurricane Catastrophe Fund under certain 
32         circumstances; requiring that certain policies contain 
33         a specified rate notice; requiring insurers to offer 
34         applicants or insureds an estimate of the premium for 
35         a policy from Citizens Property Insurance Corporation 
36         reflecting similar coverage, limits, and deductibles; 
37         requiring applicants or insureds to provide a signed 
38         premium comparison acknowledgement; specifying 
39         criteria for insurer compliance with certain 
40         requirements; specifying acknowledgement contents; 
41         requiring insurers and agents to retain a copy of the 
42         acknowledgement for a specified time; specifying a 
43         presumption created by a signed acknowledgement; 
44         specifying types of residential property insurance 
45         policies that are not eligible for certain rates or 
46         subject to other requirements; requiring written 
47         notice of certain nonrenewals; preserving insurer 
48         authority to cancel policies; specifying a criterion 
49         for what constitutes an offer to renew a policy; 
50         providing an effective date. 
51 
52  Be It Enacted by the Legislature of the State of Florida: 
53 
54         Section 1. Paragraph (l) is added to subsection (2) of 
55  section 627.062, Florida Statutes, to read: 
56         627.062 Rate standards.— 
57         (2) As to all such classes of insurance: 
58         (l)1. An insurer complying with the requirements of s. 
59  627.7031 may use a rate for residential property insurance, as 
60  defined in s. 627.4025, different from the otherwise applicable 
61  filed rate as provided in this paragraph. 
62         2. Policies subject to this paragraph may not be counted in 
63  the calculation under s. 627.171(2). 
64         3. Such rates shall be filed with the office as a separate 
65  filing. The filing must be accompanied by an actuary’s 
66  certification stating that the filing was prepared in accordance 
67  with current actuarial standards of practice of the Actuarial 
68  Standards Board and that the rates are within a range consistent 
69  with applicable actuarial principles or, when the percentage 
70  limitations of this paragraph do not allow for a rate within a 
71  range consistent with applicable actuarial principles, the 
72  certification must state that the rates are below such range. 
73  The initial rates used by an insurer under this paragraph may 
74  not provide for rates that represent more than a 10 percent 
75  statewide average rate increase over the most recently filed and 
76  approved rate. A rate filing made pursuant to this paragraph 
77  submitted in any year following the implementation of such 
78  initial rates may not provide for rates that represent more than 
79  a 10 percent statewide average rate increase in any one year 
80  over the rates in effect under this paragraph at the time of the 
81  filing. A rate filing made pursuant to this paragraph may not 
82  provide for a percentage rate increase as to any one 
83  policyholder which exceeds two times the statewide average rate 
84  increase provided in the filing. 
85         4. This paragraph does not affect the authority of the 
86  office to disapprove a rate as inadequate or to disapprove a 
87  rate filing for charging any insured or applicant a higher 
88  premium solely because of the insured’s or applicant’s race, 
89  color, creed, marital status, sex, or national origin. Upon 
90  finding that an insurer has used any such factor in charging an 
91  insured or applicant a higher premium, the office may direct the 
92  insurer to make a new filing for a new rate that does not use 
93  such factor. 
94 
95  The provisions of this subsection shall not apply to workers’ 
96  compensation and employer’s liability insurance and to motor 
97  vehicle insurance. 
98         Section 2. Paragraphs (b) and (c) of subsection (6) of 
99  section 627.351, Florida Statutes, are amended, present 
100  paragraphs (g) through (ff) of subsection (6) of that section 
101  are redesignated as paragraphs (f) through (ee), respectively, 
102  and present paragraph (f) of that subsection is redesignated as 
103  paragraph (ff) of that subsection, to read: 
104         627.351 Insurance risk apportionment plans.— 
105         (6) CITIZENS PROPERTY INSURANCE CORPORATION.— 
106         (b)1. All insurers authorized to write one or more subject 
107  lines of business in this state are subject to assessment by the 
108  corporation and, for the purposes of this subsection, are 
109  referred to collectively as “assessable insurers.” Insurers 
110  writing one or more subject lines of business in this state 
111  pursuant to part VIII of chapter 626 are not assessable 
112  insurers, but insureds who procure one or more subject lines of 
113  business in this state pursuant to part VIII of chapter 626 are 
114  subject to assessment by the corporation and are referred to 
115  collectively as “assessable insureds.” An authorized insurer’s 
116  assessment liability shall begin on the first day of the 
117  calendar year following the year in which the insurer was issued 
118  a certificate of authority to transact insurance for subject 
119  lines of business in this state and shall terminate 1 year after 
120  the end of the first calendar year during which the insurer no 
121  longer holds a certificate of authority to transact insurance 
122  for subject lines of business in this state. 
123         2.a. All revenues, assets, liabilities, losses, and 
124  expenses of the corporation shall be divided into three separate 
125  accounts as follows: 
126         (I) A personal lines account for personal residential 
127  policies issued by the corporation or issued by the Residential 
128  Property and Casualty Joint Underwriting Association and renewed 
129  by the corporation that provide comprehensive, multiperil 
130  coverage on risks that are not located in areas eligible for 
131  coverage in the Florida Windstorm Underwriting Association as 
132  those areas were defined on January 1, 2002, and for such 
133  policies that do not provide coverage for the peril of wind on 
134  risks that are located in such areas; 
135         (II) A commercial lines account for commercial residential 
136  and commercial nonresidential policies issued by the corporation 
137  or issued by the Residential Property and Casualty Joint 
138  Underwriting Association and renewed by the corporation that 
139  provide coverage for basic property perils on risks that are not 
140  located in areas eligible for coverage in the Florida Windstorm 
141  Underwriting Association as those areas were defined on January 
142  1, 2002, and for such policies that do not provide coverage for 
143  the peril of wind on risks that are located in such areas; and 
144         (III) A high-risk account for personal residential policies 
145  and commercial residential and commercial nonresidential 
146  property policies issued by the corporation or transferred to 
147  the corporation that provide coverage for the peril of wind on 
148  risks that are located in areas eligible for coverage in the 
149  Florida Windstorm Underwriting Association as those areas were 
150  defined on January 1, 2002. The corporation may offer policies 
151  that provide multiperil coverage and the corporation shall 
152  continue to offer policies that provide coverage only for the 
153  peril of wind for risks located in areas eligible for coverage 
154  in the high-risk account. In issuing multiperil coverage, the 
155  corporation may use its approved policy forms and rates for the 
156  personal lines account. An applicant or insured who is eligible 
157  to purchase a multiperil policy from the corporation may 
158  purchase a multiperil policy from an authorized insurer without 
159  prejudice to the applicant’s or insured’s eligibility to 
160  prospectively purchase a policy that provides coverage only for 
161  the peril of wind from the corporation. An applicant or insured 
162  who is eligible for a corporation policy that provides coverage 
163  only for the peril of wind may elect to purchase or retain such 
164  policy and also purchase or retain coverage excluding wind from 
165  an authorized insurer without prejudice to the applicant’s or 
166  insured’s eligibility to prospectively purchase a policy that 
167  provides multiperil coverage from the corporation. It is the 
168  goal of the Legislature that there would be an overall average 
169  savings of 10 percent or more for a policyholder who currently 
170  has a wind-only policy with the corporation, and an ex-wind 
171  policy with a voluntary insurer or the corporation, and who then 
172  obtains a multiperil policy from the corporation. It is the 
173  intent of the Legislature that the offer of multiperil coverage 
174  in the high-risk account be made and implemented in a manner 
175  that does not adversely affect the tax-exempt status of the 
176  corporation or creditworthiness of or security for currently 
177  outstanding financing obligations or credit facilities of the 
178  high-risk account, the personal lines account, or the commercial 
179  lines account. The high-risk account must also include quota 
180  share primary insurance under subparagraph (c)2. The area 
181  eligible for coverage under the high-risk account also includes 
182  the area within Port Canaveral, which is bordered on the south 
183  by the City of Cape Canaveral, bordered on the west by the 
184  Banana River, and bordered on the north by Federal Government 
185  property. 
186         b. The three separate accounts must be maintained as long 
187  as financing obligations entered into by the Florida Windstorm 
188  Underwriting Association or Residential Property and Casualty 
189  Joint Underwriting Association are outstanding, in accordance 
190  with the terms of the corresponding financing documents. When 
191  the financing obligations are no longer outstanding, in 
192  accordance with the terms of the corresponding financing 
193  documents, the corporation may use a single account for all 
194  revenues, assets, liabilities, losses, and expenses of the 
195  corporation. Consistent with the requirement of this 
196  subparagraph and prudent investment policies that minimize the 
197  cost of carrying debt, the board shall exercise its best efforts 
198  to retire existing debt or to obtain approval of necessary 
199  parties to amend the terms of existing debt, so as to structure 
200  the most efficient plan to consolidate the three separate 
201  accounts into a single account. By February 1, 2007, the board 
202  shall submit a report to the Financial Services Commission, the 
203  President of the Senate, and the Speaker of the House of 
204  Representatives which includes an analysis of consolidating the 
205  accounts, the actions the board has taken to minimize the cost 
206  of carrying debt, and its recommendations for executing the most 
207  efficient plan. 
208         c. Creditors of the Residential Property and Casualty Joint 
209  Underwriting Association and of the accounts specified in sub 
210  sub-subparagraphs a.(I) and (II) may have a claim against, and 
211  recourse to, the accounts referred to in sub-sub-subparagraphs 
212  a.(I) and (II) and shall have no claim against, or recourse to, 
213  the account referred to in sub-sub-subparagraph a.(III). 
214  Creditors of the Florida Windstorm Underwriting Association 
215  shall have a claim against, and recourse to, the account 
216  referred to in sub-sub-subparagraph a.(III) and shall have no 
217  claim against, or recourse to, the accounts referred to in sub 
218  sub-subparagraphs a.(I) and (II). 
219         d. Revenues, assets, liabilities, losses, and expenses not 
220  attributable to particular accounts shall be prorated among the 
221  accounts. 
222         e. The Legislature finds that the revenues of the 
223  corporation are revenues that are necessary to meet the 
224  requirements set forth in documents authorizing the issuance of 
225  bonds under this subsection. 
226         f. No part of the income of the corporation may inure to 
227  the benefit of any private person. 
228         3. With respect to a deficit in an account: 
229         a. After accounting for the Citizens policyholder surcharge 
230  imposed under sub-subparagraph i., when the remaining projected 
231  deficit incurred in a particular calendar year is not greater 
232  than 6 percent of the aggregate statewide direct written premium 
233  for the subject lines of business for the prior calendar year, 
234  the entire deficit shall be recovered through regular 
235  assessments of assessable insurers under paragraph (p) and 
236  assessable insureds. 
237         b. After accounting for the Citizens policyholder surcharge 
238  imposed under sub-subparagraph i., when the remaining projected 
239  deficit incurred in a particular calendar year exceeds 6 percent 
240  of the aggregate statewide direct written premium for the 
241  subject lines of business for the prior calendar year, the 
242  corporation shall levy regular assessments on assessable 
243  insurers under paragraph (p) and on assessable insureds in an 
244  amount equal to the greater of 6 percent of the deficit or 6 
245  percent of the aggregate statewide direct written premium for 
246  the subject lines of business for the prior calendar year. Any 
247  remaining deficit shall be recovered through emergency 
248  assessments under sub-subparagraph d. 
249         c. Each assessable insurer’s share of the amount being 
250  assessed under sub-subparagraph a. or sub-subparagraph b. shall 
251  be in the proportion that the assessable insurer’s direct 
252  written premium for the subject lines of business for the year 
253  preceding the assessment bears to the aggregate statewide direct 
254  written premium for the subject lines of business for that year. 
255  The assessment percentage applicable to each assessable insured 
256  is the ratio of the amount being assessed under sub-subparagraph 
257  a. or sub-subparagraph b. to the aggregate statewide direct 
258  written premium for the subject lines of business for the prior 
259  year. Assessments levied by the corporation on assessable 
260  insurers under sub-subparagraphs a. and b. shall be paid as 
261  required by the corporation’s plan of operation and paragraph 
262  (p). Assessments levied by the corporation on assessable 
263  insureds under sub-subparagraphs a. and b. shall be collected by 
264  the surplus lines agent at the time the surplus lines agent 
265  collects the surplus lines tax required by s. 626.932 and shall 
266  be paid to the Florida Surplus Lines Service Office at the time 
267  the surplus lines agent pays the surplus lines tax to the 
268  Florida Surplus Lines Service Office. Upon receipt of regular 
269  assessments from surplus lines agents, the Florida Surplus Lines 
270  Service Office shall transfer the assessments directly to the 
271  corporation as determined by the corporation. 
272         d. Upon a determination by the board of governors that a 
273  deficit in an account exceeds the amount that will be recovered 
274  through regular assessments under sub-subparagraph a. or sub 
275  subparagraph b., plus the amount that is expected to be 
276  recovered through surcharges under sub-subparagraph i., as to 
277  the remaining projected deficit the board shall levy, after 
278  verification by the office, emergency assessments, for as many 
279  years as necessary to cover the deficits, to be collected by 
280  assessable insurers and the corporation and collected from 
281  assessable insureds upon issuance or renewal of policies for 
282  subject lines of business, excluding National Flood Insurance 
283  policies. The amount of the emergency assessment collected in a 
284  particular year shall be a uniform percentage of that year’s 
285  direct written premium for subject lines of business and all 
286  accounts of the corporation, excluding National Flood Insurance 
287  Program policy premiums, as annually determined by the board and 
288  verified by the office. The office shall verify the arithmetic 
289  calculations involved in the board’s determination within 30 
290  days after receipt of the information on which the determination 
291  was based. Notwithstanding any other provision of law, the 
292  corporation and each assessable insurer that writes subject 
293  lines of business shall collect emergency assessments from its 
294  policyholders without such obligation being affected by any 
295  credit, limitation, exemption, or deferment. Emergency 
296  assessments levied by the corporation on assessable insureds 
297  shall be collected by the surplus lines agent at the time the 
298  surplus lines agent collects the surplus lines tax required by 
299  s. 626.932 and shall be paid to the Florida Surplus Lines 
300  Service Office at the time the surplus lines agent pays the 
301  surplus lines tax to the Florida Surplus Lines Service Office. 
302  The emergency assessments so collected shall be transferred 
303  directly to the corporation on a periodic basis as determined by 
304  the corporation and shall be held by the corporation solely in 
305  the applicable account. The aggregate amount of emergency 
306  assessments levied for an account under this sub-subparagraph in 
307  any calendar year may, at the discretion of the board of 
308  governors, be less than but may not exceed the greater of 10 
309  percent of the amount needed to cover the deficit, plus 
310  interest, fees, commissions, required reserves, and other costs 
311  associated with financing of the original deficit, or 10 percent 
312  of the aggregate statewide direct written premium for subject 
313  lines of business and for all accounts of the corporation for 
314  the prior year, plus interest, fees, commissions, required 
315  reserves, and other costs associated with financing the deficit. 
316         e. The corporation may pledge the proceeds of assessments, 
317  projected recoveries from the Florida Hurricane Catastrophe 
318  Fund, other insurance and reinsurance recoverables, policyholder 
319  surcharges and other surcharges, and other funds available to 
320  the corporation as the source of revenue for and to secure bonds 
321  issued under paragraph (p), bonds or other indebtedness issued 
322  under subparagraph (c)3., or lines of credit or other financing 
323  mechanisms issued or created under this subsection, or to retire 
324  any other debt incurred as a result of deficits or events giving 
325  rise to deficits, or in any other way that the board determines 
326  will efficiently recover such deficits. The purpose of the lines 
327  of credit or other financing mechanisms is to provide additional 
328  resources to assist the corporation in covering claims and 
329  expenses attributable to a catastrophe. As used in this 
330  subsection, the term “assessments” includes regular assessments 
331  under sub-subparagraph a., sub-subparagraph b., or subparagraph 
332  (p)1. and emergency assessments under sub-subparagraph d. 
333  Emergency assessments collected under sub-subparagraph d. are 
334  not part of an insurer’s rates, are not premium, and are not 
335  subject to premium tax, fees, or commissions; however, failure 
336  to pay the emergency assessment shall be treated as failure to 
337  pay premium. The emergency assessments under sub-subparagraph d. 
338  shall continue as long as any bonds issued or other indebtedness 
339  incurred with respect to a deficit for which the assessment was 
340  imposed remain outstanding, unless adequate provision has been 
341  made for the payment of such bonds or other indebtedness 
342  pursuant to the documents governing such bonds or other 
343  indebtedness. 
344         f. As used in this subsection for purposes of any deficit 
345  incurred on or after January 25, 2007, the term “subject lines 
346  of business” means insurance written by assessable insurers or 
347  procured by assessable insureds for all property and casualty 
348  lines of business in this state, but not including workers’ 
349  compensation or medical malpractice. As used in the sub 
350  subparagraph, the term “property and casualty lines of business” 
351  includes all lines of business identified on Form 2, Exhibit of 
352  Premiums and Losses, in the annual statement required of 
353  authorized insurers by s. 624.424 and any rule adopted under 
354  this section, except for those lines identified as accident and 
355  health insurance and except for policies written under the 
356  National Flood Insurance Program or the Federal Crop Insurance 
357  Program. For purposes of this sub-subparagraph, the term 
358  “workers’ compensation” includes both workers’ compensation 
359  insurance and excess workers’ compensation insurance. 
360         g. The Florida Surplus Lines Service Office shall determine 
361  annually the aggregate statewide written premium in subject 
362  lines of business procured by assessable insureds and shall 
363  report that information to the corporation in a form and at a 
364  time the corporation specifies to ensure that the corporation 
365  can meet the requirements of this subsection and the 
366  corporation’s financing obligations. 
367         h. The Florida Surplus Lines Service Office shall verify 
368  the proper application by surplus lines agents of assessment 
369  percentages for regular assessments and emergency assessments 
370  levied under this subparagraph on assessable insureds and shall 
371  assist the corporation in ensuring the accurate, timely 
372  collection and payment of assessments by surplus lines agents as 
373  required by the corporation. 
374         i.(I) If a deficit is incurred in any account in 2008 or 
375  thereafter, the board of governors shall levy a Citizens 
376  policyholder surcharge against all policyholders of the 
377  corporation. 
378         (II) The Citizens policyholder surcharge for a 12-month 
379  period, which shall be levied collected at the time of issuance 
380  or renewal of a policy, as a uniform percentage of the premium 
381  for the policy of up to 15 percent of such premium, which funds 
382  shall be used to offset the deficit. 
383         (III) The Citizens policyholder surcharge is payable upon 
384  cancellation or termination of the policy, upon renewal of the 
385  policy, or upon issuance of a new policy by Citizens within the 
386  first 12 months after the date of the levy or the period of time 
387  necessary to fully collect the Citizens policyholder surcharge 
388  amount. 
389         (IV) The corporation may not levy any regular assessments 
390  under paragraph (q) pursuant to sub-subparagraph a. or sub 
391  subparagraph b. with respect to a particular year’s deficit 
392  until the corporation has first levied a Citizens policyholder 
393  surcharge under this sub-subparagraph in the full amount 
394  authorized by this sub-subparagraph. 
395         (V) Citizens policyholder surcharges under this sub 
396  subparagraph are not considered premium and are not subject to 
397  commissions, fees, or premium taxes. However, failure to pay 
398  such surcharges shall be treated as failure to pay premium. 
399         j. If the amount of any assessments or surcharges collected 
400  from corporation policyholders, assessable insurers or their 
401  policyholders, or assessable insureds exceeds the amount of the 
402  deficits, such excess amounts shall be remitted to and retained 
403  by the corporation in a reserve to be used by the corporation, 
404  as determined by the board of governors and approved by the 
405  office, to pay claims or reduce any past, present, or future 
406  plan-year deficits or to reduce outstanding debt. 
407         (c) The plan of operation of the corporation: 
408         1. Must provide for adoption of residential property and 
409  casualty insurance policy forms and commercial residential and 
410  nonresidential property insurance forms, which forms must be 
411  approved by the office prior to use. The corporation shall adopt 
412  the following policy forms: 
413         a. Standard personal lines policy forms that are 
414  comprehensive multiperil policies providing full coverage of a 
415  residential property equivalent to the coverage provided in the 
416  private insurance market under an HO-3, HO-4, or HO-6 policy. 
417         b. Basic personal lines policy forms that are policies 
418  similar to an HO-8 policy or a dwelling fire policy that provide 
419  coverage meeting the requirements of the secondary mortgage 
420  market, but which coverage is more limited than the coverage 
421  under a standard policy. 
422         c. Commercial lines residential and nonresidential policy 
423  forms that are generally similar to the basic perils of full 
424  coverage obtainable for commercial residential structures and 
425  commercial nonresidential structures in the admitted voluntary 
426  market. 
427         d. Personal lines and commercial lines residential property 
428  insurance forms that cover the peril of wind only. The forms are 
429  applicable only to residential properties located in areas 
430  eligible for coverage under the high-risk account referred to in 
431  sub-subparagraph (b)2.a. 
432         e. Commercial lines nonresidential property insurance forms 
433  that cover the peril of wind only. The forms are applicable only 
434  to nonresidential properties located in areas eligible for 
435  coverage under the high-risk account referred to in sub 
436  subparagraph (b)2.a. 
437         f. The corporation may adopt variations of the policy forms 
438  listed in sub-subparagraphs a.-e. that contain more restrictive 
439  coverage. 
440         2.a. Must provide that the corporation adopt a program in 
441  which the corporation and authorized insurers enter into quota 
442  share primary insurance agreements for hurricane coverage, as 
443  defined in s. 627.4025(2)(a), for eligible risks, and adopt 
444  property insurance forms for eligible risks which cover the 
445  peril of wind only. As used in this subsection, the term: 
446         (I) “Quota share primary insurance” means an arrangement in 
447  which the primary hurricane coverage of an eligible risk is 
448  provided in specified percentages by the corporation and an 
449  authorized insurer. The corporation and authorized insurer are 
450  each solely responsible for a specified percentage of hurricane 
451  coverage of an eligible risk as set forth in a quota share 
452  primary insurance agreement between the corporation and an 
453  authorized insurer and the insurance contract. The 
454  responsibility of the corporation or authorized insurer to pay 
455  its specified percentage of hurricane losses of an eligible 
456  risk, as set forth in the quota share primary insurance 
457  agreement, may not be altered by the inability of the other 
458  party to the agreement to pay its specified percentage of 
459  hurricane losses. Eligible risks that are provided hurricane 
460  coverage through a quota share primary insurance arrangement 
461  must be provided policy forms that set forth the obligations of 
462  the corporation and authorized insurer under the arrangement, 
463  clearly specify the percentages of quota share primary insurance 
464  provided by the corporation and authorized insurer, and 
465  conspicuously and clearly state that neither the authorized 
466  insurer nor the corporation may be held responsible beyond its 
467  specified percentage of coverage of hurricane losses. 
468         (II) “Eligible risks” means personal lines residential and 
469  commercial lines residential risks that meet the underwriting 
470  criteria of the corporation and are located in areas that were 
471  eligible for coverage by the Florida Windstorm Underwriting 
472  Association on January 1, 2002. 
473         b. The corporation may enter into quota share primary 
474  insurance agreements with authorized insurers at corporation 
475  coverage levels of 90 percent and 50 percent. 
476         c. If the corporation determines that additional coverage 
477  levels are necessary to maximize participation in quota share 
478  primary insurance agreements by authorized insurers, the 
479  corporation may establish additional coverage levels. However, 
480  the corporation’s quota share primary insurance coverage level 
481  may not exceed 90 percent. 
482         d. Any quota share primary insurance agreement entered into 
483  between an authorized insurer and the corporation must provide 
484  for a uniform specified percentage of coverage of hurricane 
485  losses, by county or territory as set forth by the corporation 
486  board, for all eligible risks of the authorized insurer covered 
487  under the quota share primary insurance agreement. 
488         e. Any quota share primary insurance agreement entered into 
489  between an authorized insurer and the corporation is subject to 
490  review and approval by the office. However, such agreement shall 
491  be authorized only as to insurance contracts entered into 
492  between an authorized insurer and an insured who is already 
493  insured by the corporation for wind coverage. 
494         f. For all eligible risks covered under quota share primary 
495  insurance agreements, the exposure and coverage levels for both 
496  the corporation and authorized insurers shall be reported by the 
497  corporation to the Florida Hurricane Catastrophe Fund. For all 
498  policies of eligible risks covered under quota share primary 
499  insurance agreements, the corporation and the authorized insurer 
500  shall maintain complete and accurate records for the purpose of 
501  exposure and loss reimbursement audits as required by Florida 
502  Hurricane Catastrophe Fund rules. The corporation and the 
503  authorized insurer shall each maintain duplicate copies of 
504  policy declaration pages and supporting claims documents. 
505         g. The corporation board shall establish in its plan of 
506  operation standards for quota share agreements which ensure that 
507  there is no discriminatory application among insurers as to the 
508  terms of quota share agreements, pricing of quota share 
509  agreements, incentive provisions if any, and consideration paid 
510  for servicing policies or adjusting claims. 
511         h. The quota share primary insurance agreement between the 
512  corporation and an authorized insurer must set forth the 
513  specific terms under which coverage is provided, including, but 
514  not limited to, the sale and servicing of policies issued under 
515  the agreement by the insurance agent of the authorized insurer 
516  producing the business, the reporting of information concerning 
517  eligible risks, the payment of premium to the corporation, and 
518  arrangements for the adjustment and payment of hurricane claims 
519  incurred on eligible risks by the claims adjuster and personnel 
520  of the authorized insurer. Entering into a quota sharing 
521  insurance agreement between the corporation and an authorized 
522  insurer shall be voluntary and at the discretion of the 
523  authorized insurer. 
524         3. May provide that the corporation may employ or otherwise 
525  contract with individuals or other entities to provide 
526  administrative or professional services that may be appropriate 
527  to effectuate the plan. The corporation shall have the power to 
528  borrow funds, by issuing bonds or by incurring other 
529  indebtedness, and shall have other powers reasonably necessary 
530  to effectuate the requirements of this subsection, including, 
531  without limitation, the power to issue bonds and incur other 
532  indebtedness in order to refinance outstanding bonds or other 
533  indebtedness. The corporation may, but is not required to, seek 
534  judicial validation of its bonds or other indebtedness under 
535  chapter 75. The corporation may issue bonds or incur other 
536  indebtedness, or have bonds issued on its behalf by a unit of 
537  local government pursuant to subparagraph (p)2., in the absence 
538  of a hurricane or other weather-related event, upon a 
539  determination by the corporation, subject to approval by the 
540  office, that such action would enable it to efficiently meet the 
541  financial obligations of the corporation and that such 
542  financings are reasonably necessary to effectuate the 
543  requirements of this subsection. The corporation is authorized 
544  to take all actions needed to facilitate tax-free status for any 
545  such bonds or indebtedness, including formation of trusts or 
546  other affiliated entities. The corporation shall have the 
547  authority to pledge assessments, projected recoveries from the 
548  Florida Hurricane Catastrophe Fund, other reinsurance 
549  recoverables, market equalization and other surcharges, and 
550  other funds available to the corporation as security for bonds 
551  or other indebtedness. In recognition of s. 10, Art. I of the 
552  State Constitution, prohibiting the impairment of obligations of 
553  contracts, it is the intent of the Legislature that no action be 
554  taken whose purpose is to impair any bond indenture or financing 
555  agreement or any revenue source committed by contract to such 
556  bond or other indebtedness. 
557         4.a. Must require that the corporation operate subject to 
558  the supervision and approval of a board of governors consisting 
559  of eight individuals who are residents of this state, from 
560  different geographical areas of this state. The Governor, the 
561  Chief Financial Officer, the President of the Senate, and the 
562  Speaker of the House of Representatives shall each appoint two 
563  members of the board. At least one of the two members appointed 
564  by each appointing officer must have demonstrated expertise in 
565  insurance. The Chief Financial Officer shall designate one of 
566  the appointees as chair. All board members serve at the pleasure 
567  of the appointing officer. All members of the board of governors 
568  are subject to removal at will by the officers who appointed 
569  them. All board members, including the chair, must be appointed 
570  to serve for 3-year terms beginning annually on a date 
571  designated by the plan. However, for the first term beginning on 
572  or after July 1, 2009, each appointing officer shall appoint one 
573  member of the board for a 2-year term and one member for a 3 
574  year term. Any board vacancy shall be filled for the unexpired 
575  term by the appointing officer. The Chief Financial Officer 
576  shall appoint a technical advisory group to provide information 
577  and advice to the board of governors in connection with the 
578  board’s duties under this subsection. The executive director and 
579  senior managers of the corporation shall be engaged by the board 
580  and serve at the pleasure of the board. Any executive director 
581  appointed on or after July 1, 2006, is subject to confirmation 
582  by the Senate. The executive director is responsible for 
583  employing other staff as the corporation may require, subject to 
584  review and concurrence by the board. 
585         b. The board shall create a Market Accountability Advisory 
586  Committee to assist the corporation in developing awareness of 
587  its rates and its customer and agent service levels in 
588  relationship to the voluntary market insurers writing similar 
589  coverage. The members of the advisory committee shall consist of 
590  the following 11 persons, one of whom must be elected chair by 
591  the members of the committee: four representatives, one 
592  appointed by the Florida Association of Insurance Agents, one by 
593  the Florida Association of Insurance and Financial Advisors, one 
594  by the Professional Insurance Agents of Florida, and one by the 
595  Latin American Association of Insurance Agencies; three 
596  representatives appointed by the insurers with the three highest 
597  voluntary market share of residential property insurance 
598  business in the state; one representative from the Office of 
599  Insurance Regulation; one consumer appointed by the board who is 
600  insured by the corporation at the time of appointment to the 
601  committee; one representative appointed by the Florida 
602  Association of Realtors; and one representative appointed by the 
603  Florida Bankers Association. All members must serve for 3-year 
604  terms and may serve for consecutive terms. The committee shall 
605  report to the corporation at each board meeting on insurance 
606  market issues which may include rates and rate competition with 
607  the voluntary market; service, including policy issuance, claims 
608  processing, and general responsiveness to policyholders, 
609  applicants, and agents; and matters relating to depopulation. 
610         5. Must provide a procedure for determining the eligibility 
611  of a risk for coverage, as follows: 
612         a. Subject to the provisions of s. 627.3517, with respect 
613  to personal lines residential risks, if the risk is offered 
614  coverage from an authorized insurer at the insurer’s approved 
615  rate under either a standard policy including wind coverage or, 
616  if consistent with the insurer’s underwriting rules as filed 
617  with the office, a basic policy including wind coverage, for a 
618  new application to the corporation for coverage, the risk is not 
619  eligible for any policy issued by the corporation unless the 
620  premium for coverage from the authorized insurer is more than 15 
621  percent greater than the premium for comparable coverage from 
622  the corporation. If the risk is not able to obtain any such 
623  offer, the risk is eligible for either a standard policy 
624  including wind coverage or a basic policy including wind 
625  coverage issued by the corporation; however, if the risk could 
626  not be insured under a standard policy including wind coverage 
627  regardless of market conditions, the risk shall be eligible for 
628  a basic policy including wind coverage unless rejected under 
629  subparagraph 8. However, with regard to a policyholder of the 
630  corporation or a policyholder removed from the corporation 
631  through an assumption agreement until the end of the assumption 
632  period, the policyholder remains eligible for coverage from the 
633  corporation regardless of any offer of coverage from an 
634  authorized insurer or surplus lines insurer. The corporation 
635  shall determine the type of policy to be provided on the basis 
636  of objective standards specified in the underwriting manual and 
637  based on generally accepted underwriting practices. 
638         (I) If the risk accepts an offer of coverage through the 
639  market assistance plan or an offer of coverage through a 
640  mechanism established by the corporation before a policy is 
641  issued to the risk by the corporation or during the first 30 
642  days of coverage by the corporation, and the producing agent who 
643  submitted the application to the plan or to the corporation is 
644  not currently appointed by the insurer, the insurer shall: 
645         (A) Pay to the producing agent of record of the policy, for 
646  the first year, an amount that is the greater of the insurer’s 
647  usual and customary commission for the type of policy written or 
648  a fee equal to the usual and customary commission of the 
649  corporation; or 
650         (B) Offer to allow the producing agent of record of the 
651  policy to continue servicing the policy for a period of not less 
652  than 1 year and offer to pay the agent the greater of the 
653  insurer’s or the corporation’s usual and customary commission 
654  for the type of policy written. 
655 
656  If the producing agent is unwilling or unable to accept 
657  appointment, the new insurer shall pay the agent in accordance 
658  with sub-sub-sub-subparagraph (A). 
659         (II) When the corporation enters into a contractual 
660  agreement for a take-out plan, the producing agent of record of 
661  the corporation policy is entitled to retain any unearned 
662  commission on the policy, and the insurer shall: 
663         (A) Pay to the producing agent of record of the corporation 
664  policy, for the first year, an amount that is the greater of the 
665  insurer’s usual and customary commission for the type of policy 
666  written or a fee equal to the usual and customary commission of 
667  the corporation; or 
668         (B) Offer to allow the producing agent of record of the 
669  corporation policy to continue servicing the policy for a period 
670  of not less than 1 year and offer to pay the agent the greater 
671  of the insurer’s or the corporation’s usual and customary 
672  commission for the type of policy written. 
673 
674  If the producing agent is unwilling or unable to accept 
675  appointment, the new insurer shall pay the agent in accordance 
676  with sub-sub-sub-subparagraph (A). 
677         b. With respect to commercial lines residential risks, for 
678  a new application to the corporation for coverage, if the risk 
679  is offered coverage under a policy including wind coverage from 
680  an authorized insurer at its approved rate, the risk is not 
681  eligible for any policy issued by the corporation unless the 
682  premium for coverage from the authorized insurer is more than 15 
683  percent greater than the premium for comparable coverage from 
684  the corporation. If the risk is not able to obtain any such 
685  offer, the risk is eligible for a policy including wind coverage 
686  issued by the corporation. However, with regard to a 
687  policyholder of the corporation or a policyholder removed from 
688  the corporation through an assumption agreement until the end of 
689  the assumption period, the policyholder remains eligible for 
690  coverage from the corporation regardless of any offer of 
691  coverage from an authorized insurer or surplus lines insurer. 
692         (I) If the risk accepts an offer of coverage through the 
693  market assistance plan or an offer of coverage through a 
694  mechanism established by the corporation before a policy is 
695  issued to the risk by the corporation or during the first 30 
696  days of coverage by the corporation, and the producing agent who 
697  submitted the application to the plan or the corporation is not 
698  currently appointed by the insurer, the insurer shall: 
699         (A) Pay to the producing agent of record of the policy, for 
700  the first year, an amount that is the greater of the insurer’s 
701  usual and customary commission for the type of policy written or 
702  a fee equal to the usual and customary commission of the 
703  corporation; or 
704         (B) Offer to allow the producing agent of record of the 
705  policy to continue servicing the policy for a period of not less 
706  than 1 year and offer to pay the agent the greater of the 
707  insurer’s or the corporation’s usual and customary commission 
708  for the type of policy written. 
709 
710  If the producing agent is unwilling or unable to accept 
711  appointment, the new insurer shall pay the agent in accordance 
712  with sub-sub-sub-subparagraph (A). 
713         (II) When the corporation enters into a contractual 
714  agreement for a take-out plan, the producing agent of record of 
715  the corporation policy is entitled to retain any unearned 
716  commission on the policy, and the insurer shall: 
717         (A) Pay to the producing agent of record of the corporation 
718  policy, for the first year, an amount that is the greater of the 
719  insurer’s usual and customary commission for the type of policy 
720  written or a fee equal to the usual and customary commission of 
721  the corporation; or 
722         (B) Offer to allow the producing agent of record of the 
723  corporation policy to continue servicing the policy for a period 
724  of not less than 1 year and offer to pay the agent the greater 
725  of the insurer’s or the corporation’s usual and customary 
726  commission for the type of policy written. 
727 
728  If the producing agent is unwilling or unable to accept 
729  appointment, the new insurer shall pay the agent in accordance 
730  with sub-sub-sub-subparagraph (A). 
731         c. For purposes of determining comparable coverage under 
732  sub-subparagraphs a. and b., the comparison shall be based on 
733  those forms and coverages that are reasonably comparable. The 
734  corporation may rely on a determination of comparable coverage 
735  and premium made by the producing agent who submits the 
736  application to the corporation, made in the agent’s capacity as 
737  the corporation’s agent. A comparison may be made solely of the 
738  premium with respect to the main building or structure only on 
739  the following basis: the same coverage A or other building 
740  limits; the same percentage hurricane deductible that applies on 
741  an annual basis or that applies to each hurricane for commercial 
742  residential property; the same percentage of ordinance and law 
743  coverage, if the same limit is offered by both the corporation 
744  and the authorized insurer; the same mitigation credits, to the 
745  extent the same types of credits are offered both by the 
746  corporation and the authorized insurer; the same method for loss 
747  payment, such as replacement cost or actual cash value, if the 
748  same method is offered both by the corporation and the 
749  authorized insurer in accordance with underwriting rules; and 
750  any other form or coverage that is reasonably comparable as 
751  determined by the board. If an application is submitted to the 
752  corporation for wind-only coverage in the high-risk account, the 
753  premium for the corporation’s wind-only policy plus the premium 
754  for the ex-wind policy that is offered by an authorized insurer 
755  to the applicant shall be compared to the premium for multiperil 
756  coverage offered by an authorized insurer, subject to the 
757  standards for comparison specified in this subparagraph. If the 
758  corporation or the applicant requests from the authorized 
759  insurer a breakdown of the premium of the offer by types of 
760  coverage so that a comparison may be made by the corporation or 
761  its agent and the authorized insurer refuses or is unable to 
762  provide such information, the corporation may treat the offer as 
763  not being an offer of coverage from an authorized insurer at the 
764  insurer’s approved rate. 
765         6. Must include rules for classifications of risks and 
766  rates therefor. 
767         7. Must provide that if premium and investment income for 
768  an account attributable to a particular calendar year are in 
769  excess of projected losses and expenses for the account 
770  attributable to that year, such excess shall be held in surplus 
771  in the account. Such surplus shall be available to defray 
772  deficits in that account as to future years and shall be used 
773  for that purpose prior to assessing assessable insurers and 
774  assessable insureds as to any calendar year. 
775         8. Must provide objective criteria and procedures to be 
776  uniformly applied for all applicants in determining whether an 
777  individual risk is so hazardous as to be uninsurable. In making 
778  this determination and in establishing the criteria and 
779  procedures, the following shall be considered: 
780         a. Whether the likelihood of a loss for the individual risk 
781  is substantially higher than for other risks of the same class; 
782  and 
783         b. Whether the uncertainty associated with the individual 
784  risk is such that an appropriate premium cannot be determined. 
785 
786  The acceptance or rejection of a risk by the corporation shall 
787  be construed as the private placement of insurance, and the 
788  provisions of chapter 120 shall not apply. 
789         9. Must provide that the corporation shall make its best 
790  efforts to procure catastrophe reinsurance at reasonable rates, 
791  to cover its projected 100-year probable maximum loss as 
792  determined by the board of governors. 
793         10. The policies issued by the corporation must provide 
794  that, if the corporation or the market assistance plan obtains 
795  an offer from an authorized insurer to cover the risk at its 
796  approved rates, the risk is no longer eligible for renewal 
797  through the corporation, except as otherwise provided in this 
798  subsection. 
799         11. Corporation policies and applications must include a 
800  notice that the corporation policy could, under this section, be 
801  replaced with a policy issued by an authorized insurer that does 
802  not provide coverage identical to the coverage provided by the 
803  corporation. The notice shall also specify that acceptance of 
804  corporation coverage creates a conclusive presumption that the 
805  applicant or policyholder is aware of this potential. 
806         12. May establish, subject to approval by the office, 
807  different eligibility requirements and operational procedures 
808  for any line or type of coverage for any specified county or 
809  area if the board determines that such changes to the 
810  eligibility requirements and operational procedures are 
811  justified due to the voluntary market being sufficiently stable 
812  and competitive in such area or for such line or type of 
813  coverage and that consumers who, in good faith, are unable to 
814  obtain insurance through the voluntary market through ordinary 
815  methods would continue to have access to coverage from the 
816  corporation. When coverage is sought in connection with a real 
817  property transfer, such requirements and procedures shall not 
818  provide for an effective date of coverage later than the date of 
819  the closing of the transfer as established by the transferor, 
820  the transferee, and, if applicable, the lender. 
821         13. Must provide that, with respect to the high-risk 
822  account, any assessable insurer with a surplus as to 
823  policyholders of $25 million or less writing 25 percent or more 
824  of its total countrywide property insurance premiums in this 
825  state may petition the office, within the first 90 days of each 
826  calendar year, to qualify as a limited apportionment company. A 
827  regular assessment levied by the corporation on a limited 
828  apportionment company for a deficit incurred by the corporation 
829  for the high-risk account in 2006 or thereafter may be paid to 
830  the corporation on a monthly basis as the assessments are 
831  collected by the limited apportionment company from its insureds 
832  pursuant to s. 627.3512, but the regular assessment must be paid 
833  in full within 12 months after being levied by the corporation. 
834  A limited apportionment company shall collect from its 
835  policyholders any emergency assessment imposed under sub 
836  subparagraph (b)3.d. The plan shall provide that, if the office 
837  determines that any regular assessment will result in an 
838  impairment of the surplus of a limited apportionment company, 
839  the office may direct that all or part of such assessment be 
840  deferred as provided in subparagraph (p)4. However, there shall 
841  be no limitation or deferment of an emergency assessment to be 
842  collected from policyholders under sub-subparagraph (b)3.d. 
843         14. Must provide that the corporation appoint as its 
844  licensed agents only those agents who also hold an appointment 
845  as defined in s. 626.015(3) with an insurer who at the time of 
846  the agent’s initial appointment by the corporation is authorized 
847  to write and is actually writing personal lines residential 
848  property coverage, commercial residential property coverage, or 
849  commercial nonresidential property coverage within the state. 
850         15. Must provide, by July 1, 2007, a premium payment plan 
851  option to its policyholders which allows at a minimum for 
852  quarterly and semiannual payment of premiums. A monthly payment 
853  plan may, but is not required to, be offered. 
854         16. Must limit coverage on mobile homes or manufactured 
855  homes built prior to 1994 to actual cash value of the dwelling 
856  rather than replacement costs of the dwelling. 
857         17. May provide such limits of coverage as the board 
858  determines, consistent with the requirements of this subsection. 
859         18. May require commercial property to meet specified 
860  hurricane mitigation construction features as a condition of 
861  eligibility for coverage. 
862         19.a. Shall require the agent to obtain from any applicant 
863  for coverage the following acknowledgement, signed by the 
864  applicant, and shall require the agent of record to obtain the 
865  following acknowledgment from each corporation policyholder, 
866  signed by the policyholder, prior to the policy’s first renewal 
867  after the effective date of this act: 
868 
869        ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE AND ASSESSMENT 
870                             LIABILITY: 
871         1. I UNDERSTAND, AS A CITIZENS PROPERTY INSURANCE 
872         CORPORATION POLICYHOLDER, THAT IF THE CORPORATION 
873         SUSTAINS A DEFICIT AS A RESULT OF HURRICANE LOSSES OR 
874         FOR ANY OTHER REASON, MY POLICY COULD BE SUBJECT TO 
875         CITIZENS POLICYHOLDER SURCHARGES, WHICH WOULD BE DUE 
876         AND PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION 
877         OF THE POLICY, AND THAT THE SURCHARGES COULD BE AS 
878         HIGH AS 15 PERCENT OF MY PREMIUM FOR DEFICITS IN EACH 
879         OF THREE CITIZENS ACCOUNTS, OR A DIFFERENT AMOUNT AS 
880         ESTABLISHED BY THE FLORIDA LEGISLATURE. 
881         2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO 
882         EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS 
883         POLICYHOLDERS OF OTHER INSURANCE COMPANIES. 
884 
885         b. The corporation shall permanently maintain a signed copy 
886  of the signed acknowledgement required by this subparagraph, and 
887  the agent may also retain a copy. 
888         c. The signed acknowledgement form creates a conclusive 
889  presumption that the policyholder understood and accepted his or 
890  her potential surcharge and assessment liability as a Citizens 
891  policyholder. 
892         Section 3. Section 627.7031, Florida Statutes, is created 
893  to read: 
894         627.7031 Residential property insurance option.— 
895         (1) An insurer holding a certificate of authority to write 
896  property insurance in this state may offer or renew policies at 
897  rates established in accordance with s. 627.062(2)(l), subject 
898  to all of the requirements and prohibitions of this section. 
899         (2) An insurer offering or renewing policies at rates 
900  established in accordance with s. 627.062(2)(l) may not purchase 
901  coverage from the Florida Hurricane Catastrophe Fund under the 
902  temporary increase in coverage limit option under s. 
903  215.555(17). 
904         (3)(a) Before the effective date of a newly issued or 
905  renewal policy at rates established in accordance with s. 
906  627.062(2)(l), the applicant or insured must be given the 
907  following notice, printed in at least 12-point boldfaced type: 
908 
909         THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE 
910         REGULATION BY THE FLORIDA OFFICE OF INSURANCE 
911         REGULATION AND MAY BE HIGHER THAN RATES APPROVED BY 
912         THAT OFFICE. A RESIDENTIAL PROPERTY POLICY SUBJECT TO 
913         FULL RATE REGULATION REQUIREMENTS MAY BE AVAILABLE 
914         FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS 
915         PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR 
916         POLICY OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE 
917         A CITIZENS QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF 
918         INSURANCE REGULATION’S WEBSITE AT 
919         WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION ABOUT 
920         CHOICES AVAILABLE TO YOU. 
921 
922         (b) For policies renewed at a rate established in 
923  accordance with s. 627.062(2)(l), the notice described in 
924  paragraph (a) must be provided in writing at the same time as 
925  the renewal notice on a document separate from the renewal 
926  notice, but may be contained within the same mailing as the 
927  renewal notice. 
928         (4) Before the effective date of a newly issued policy at 
929  rates established in accordance with s. 627.062(2)(l), or before 
930  the effective date of the first renewal at rates established in 
931  accordance with s. 627.062(2)(l) of a policy originally issued 
932  before the effective date of this section, the applicant or 
933  insured must: 
934         (a) Be provided or offered, for comparison purposes, an 
935  estimate of the premium for a policy from Citizens Property 
936  Insurance Corporation reflecting substantially similar 
937  coverages, limits, and deductibles to the extent available. 
938         (b) Provide the insurer or agent with a signed copy of the 
939  following acknowledgement form, which must be retained by the 
940  insurer or agent for at least 3 years. If the acknowledgement 
941  form is signed by the insured or if the insured remits payment 
942  in the amount of the rate established in accordance with s. 
943  627.062(2)(l) after being mailed or otherwise provided the 
944  acknowledgement form specified in this paragraph, and after 
945  being mailed, otherwise provided, or offered the comparison 
946  specified in paragraph (a), an insurer renewing a policy at such 
947  rate shall be deemed to comply with this section, and it is 
948  presumed that the insured has been informed and understands the 
949  information contained in the comparison and acknowledgement 
950  forms: 
951 
952                           ACKNOWLEDGEMENT 
953         1. I HAVE REVIEWED THE REQUIRED DISCLOSURES AND 
954         THE REQUIRED PREMIUM COMPARISON. 
955         2. I UNDERSTAND THAT THE RATE FOR THIS 
956         RESIDENTIAL PROPERTY INSURANCE POLICY IS NOT SUBJECT 
957         TO FULL RATE REGULATION BY THE FLORIDA OFFICE OF 
958         INSURANCE REGULATION AND MAY BE HIGHER THAN RATES 
959         APPROVED BY THAT OFFICE. 
960         3. I UNDERSTAND THAT A RESIDENTIAL PROPERTY 
961         INSURANCE POLICY SUBJECT TO FULL RATE REGULATION 
962         REQUIREMENTS MAY BE AVAILABLE FROM CITIZENS PROPERTY 
963         INSURANCE CORPORATION. 
964         4. I UNDERSTAND THAT THE FLORIDA OFFICE OF 
965         INSURANCE REGULATION’S WEBSITE 
966         WWW.SHOPANDCOMPARERATES.COM CONTAINS RESIDENTIAL 
967         PROPERTY INSURANCE RATE COMPARISON INFORMATION. 
968         5. I UNDERSTAND THAT IF CITIZENS PROPERTY 
969         INSURANCE CORPORATION INCURS A DEFICIT BECAUSE OF 
970         HURRICANE LOSSES OR OTHER LOSSES, I MAY BE REQUIRED TO 
971         PAY AN ASSESSMENT BASED UPON THE PREMIUM FOR THIS 
972         POLICY AND THAT A POLICYHOLDER OF CITIZENS PROPERTY 
973         INSURANCE CORPORATION MAY BE REQUIRED TO PAY A 
974         DIFFERENT ASSESSMENT. 
975 
976         (5) The following types of residential property insurance 
977  policies are not eligible for rates established in accordance 
978  with s. 627.062(2)(l) and are not subject to the other 
979  provisions of this section: 
980         (a) Residential property insurance policies that exclude 
981  coverage for the perils of windstorm or hurricane. 
982         (b) Residential property insurance policies that are 
983  subject to a consent decree, agreement, understanding, or other 
984  arrangement between the insurer and the office relating to rates 
985  or premiums for policies removed from Citizens Property 
986  Insurance Corporation. 
987         (6) Notwithstanding s. 627.4133, an insurer that has issued 
988  a policy under this section shall provide the named insured 
989  written notice of nonrenewal at least 180 days before the 
990  effective date of the nonrenewal as to subsequent nonrenewals. 
991  However, this subsection does not prohibit an insurer from 
992  cancelling a policy as permitted under s. 627.4133. The offer of 
993  a policy at rates authorized by this section constitutes an 
994  offer to renew the policy at the rates specified in the offer 
995  and does not constitute a nonrenewal. 
996         Section 4. This act shall take effect January 1, 2011.