Bill Text: FL S1770 | 2013 | Regular Session | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Property Insurance

Spectrum: Committee Bill

Status: (Passed) 2013-05-29 - Chapter No. 2013-60, companion bill(s) passed, see SB 1850 (Ch. 2013-61) [S1770 Detail]

Download: Florida-2013-S1770-Engrossed.html
       CS for SB 1770                                   Third Engrossed
       
       
       
       
       
       
       
       
       20131770e3
       
    1                        A bill to be entitled                      
    2         An act relating to property insurance; amending s.
    3         215.555, F.S., relating to the Florida Hurricane
    4         Catastrophe Fund; revising the definition of the term
    5         “corporation”; deleting an outdated coverage level;
    6         revising the exemption of medical malpractice
    7         insurance premiums from emergency assessments if
    8         certain revenues are determined to be insufficient to
    9         fund the obligations, costs, and expenses of the
   10         Florida Hurricane Catastrophe Fund and the Florida
   11         Hurricane Catastrophe Fund Finance Corporation;
   12         changing the name of the Florida Hurricane Catastrophe
   13         Fund Finance Corporation; deleting provisions relating
   14         to temporary emergency options for additional
   15         coverage; amending s. 626.752, F.S.; exempting
   16         Citizens Property Insurance Corporation from exchange
   17         of business limitations and restrictions when placing
   18         business with authorized insurers; amending s.
   19         626.854, F.S.; revising the restrictions on public
   20         adjuster compensation, payment, commission, fee, or
   21         any other thing of value; providing penalties;
   22         deleting a provision requiring the public adjuster to
   23         ensure prompt notice of property loss claims;
   24         requiring a public adjuster to ensure that prompt
   25         notice is given of a claim to the insurer; requiring a
   26         public adjuster to meet or communicate with the
   27         insurer for a specified purpose; prohibiting a public
   28         adjuster from acquiring any interest in salvaged
   29         property; providing an exception; providing
   30         legislative intent; amending s. 627.0628, F.S.;
   31         revising the membership of the Florida Commission on
   32         Hurricane Loss Projection Methodology; amending s.
   33         627.0629, F.S.; conforming a cross-reference; amending
   34         s. 627.351, F.S.; providing that certain residential
   35         structures are not eligible for coverage by the
   36         corporation after specified dates; providing an
   37         exception; prohibiting the corporation from covering
   38         any new construction of a major structure, or
   39         substantial improvements on any major structure,
   40         commencing on or after July 1, 2014, that is seaward
   41         of the coastal construction control line or is within
   42         the Coastal Barrier Resources System; deleting a
   43         provision that limits the amount that a public
   44         adjuster may charge, agree to, or accept as
   45         compensation with respect to a claim filed under a
   46         policy of the Citizens Property Insurance Corporation;
   47         revising the membership of the board of governors of
   48         the corporation; restricting the eligibility of a risk
   49         for a renewal policy issued by the corporation under
   50         certain circumstances; revising provisions allowing a
   51         policyholder removed from the corporation to remain
   52         eligible for coverage under certain circumstances;
   53         requiring disclosure of potential corporation
   54         surcharges and policyholder obligations to try to
   55         obtain private market coverage; revising the duties
   56         and responsibilities of the internal auditor of the
   57         corporation; authorizing insurers taking out,
   58         assuming, or removing policies from the corporation to
   59         use the corporation’s policy forms and endorsements
   60         for a specified time without approval by the Office of
   61         Insurance Regulation; establishing the Office of
   62         Inspector General within the corporation; providing
   63         for appointment, qualifications, duties, and
   64         responsibilities of the inspector general; requiring
   65         the corporation to prepare a report for each calendar
   66         year relating to the loss ratio attributable to losses
   67         that are not catastrophic losses for residential
   68         coverage provided by the corporation; revising
   69         provisions relating to purchases by the corporation;
   70         providing that the corporation is subject to state
   71         agency purchasing requirements; requiring the
   72         corporation to provide notice of purchasing decisions;
   73         providing procedures for protesting such decisions;
   74         providing applicability; creating s. 627.3518, F.S.;
   75         providing purpose; providing definitions; requiring
   76         the creation of a clearinghouse program within the
   77         corporation; specifying the purposes of the program;
   78         requiring the corporation to provide a report to the
   79         Legislature; specifying certain rights and
   80         responsibilities with respect to the program;
   81         authorizing the corporation to take specified actions
   82         in establishing the program; providing conditions and
   83         requirements relating to the participation of insurers
   84         in the program; providing conditions, requirements,
   85         limitations, and procedures applicable to offers of
   86         coverage with respect to applicants for coverage with
   87         the corporation and existing policyholders of the
   88         corporation; providing requirements for certain
   89         independent insurance agents and exclusive agents with
   90         respect to submitting applications for coverage or
   91         policies for renewal to the program; providing for
   92         applicability and construction; creating s. 627.35191,
   93         F.S.; requiring the Florida Hurricane Catastrophe Fund
   94         and Citizens Property Insurance Corporation to each
   95         submit reports annually to the Legislature and the
   96         Financial Services Commission relating to aggregate
   97         net probable maximum losses, financing options, and
   98         potential assessments; providing effective dates.
   99  
  100  Be It Enacted by the Legislature of the State of Florida:
  101  
  102         Section 1. Effective June 1, 2013, paragraph (n) of
  103  subsection (2), paragraph (b) of subsection (4), paragraphs (b)
  104  and (d) of subsection (6), and present subsection (16) of
  105  section 215.555, Florida Statutes, are amended, and subsections
  106  (17) and (18) of that section are renumbered as subsections (16)
  107  and (17), respectively, to read:
  108         215.555 Florida Hurricane Catastrophe Fund.—
  109         (2) DEFINITIONS.—As used in this section:
  110         (n) “Corporation” means the State Board of Administration
  111  Florida Hurricane Catastrophe Fund Finance Corporation created
  112  in paragraph (6)(d).
  113         (4) REIMBURSEMENT CONTRACTS.—
  114         (b)1. The contract shall contain a promise by the board to
  115  reimburse the insurer for 45 percent, 75 percent, or 90 percent
  116  of its losses from each covered event in excess of the insurer’s
  117  retention, plus 5 percent of the reimbursed losses to cover loss
  118  adjustment expenses.
  119         2. The insurer must elect one of the percentage coverage
  120  levels specified in this paragraph and may, upon renewal of a
  121  reimbursement contract, elect a lower percentage coverage level
  122  if no revenue bonds issued under subsection (6) after a covered
  123  event are outstanding, or elect a higher percentage coverage
  124  level, regardless of whether or not revenue bonds are
  125  outstanding. All members of an insurer group must elect the same
  126  percentage coverage level. Any joint underwriting association,
  127  risk apportionment plan, or other entity created under s.
  128  627.351 must elect the 90-percent coverage level.
  129         3. The contract shall provide that reimbursement amounts
  130  shall not be reduced by reinsurance paid or payable to the
  131  insurer from other sources.
  132         4.Notwithstanding any other provision contained in this
  133  section, the board shall make available to insurers that
  134  purchased coverage provided by this subparagraph in 2008,
  135  insurers qualifying as limited apportionment companies under s.
  136  627.351(6)(c), and insurers that have been approved to
  137  participate in the Insurance Capital Build-Up Incentive Program
  138  pursuant to s. 215.5595 a contract or contract addendum that
  139  provides an additional amount of reimbursement coverage of up to
  140  $10 million. The premium to be charged for this additional
  141  reimbursement coverage shall be 50 percent of the additional
  142  reimbursement coverage provided, which shall include one prepaid
  143  reinstatement. The minimum retention level that an eligible
  144  participating insurer must retain associated with this
  145  additional coverage layer is 30 percent of the insurer’s surplus
  146  as of December 31, 2008, for the 2009-2010 contract year; as of
  147  December 31, 2009, for the 2010-2011 contract year; and as of
  148  December 31, 2010, for the 2011-2012 contract year. This
  149  coverage shall be in addition to all other coverage that may be
  150  provided under this section. The coverage provided by the fund
  151  under this subparagraph shall be in addition to the claims
  152  paying capacity as defined in subparagraph (c)1., but only with
  153  respect to those insurers that select the additional coverage
  154  option and meet the requirements of this subparagraph. The
  155  claims-paying capacity with respect to all other participating
  156  insurers and limited apportionment companies that do not select
  157  the additional coverage option shall be limited to their
  158  reimbursement premium’s proportionate share of the actual
  159  claims-paying capacity otherwise defined in subparagraph (c)1.
  160  and as provided for under the terms of the reimbursement
  161  contract. The optional coverage retention as specified shall be
  162  accessed before the mandatory coverage under the reimbursement
  163  contract, but once the limit of coverage selected under this
  164  option is exhausted, the insurer’s retention under the mandatory
  165  coverage will apply. This coverage will apply and be paid
  166  concurrently with mandatory coverage. This subparagraph expires
  167  on May 31, 2012.
  168         (6) REVENUE BONDS.—
  169         (b) Emergency assessments—
  170         1. If the board determines that the amount of revenue
  171  produced under subsection (5) is insufficient to fund the
  172  obligations, costs, and expenses of the fund and the
  173  corporation, including repayment of revenue bonds and that
  174  portion of the debt service coverage not met by reimbursement
  175  premiums, the board shall direct the Office of Insurance
  176  Regulation to levy, by order, an emergency assessment on direct
  177  premiums for all property and casualty lines of business in this
  178  state, including property and casualty business of surplus lines
  179  insurers regulated under part VIII of chapter 626, but not
  180  including any workers’ compensation premiums or medical
  181  malpractice premiums. As used in this subsection, the term
  182  “property and casualty business” includes all lines of business
  183  identified on Form 2, Exhibit of Premiums and Losses, in the
  184  annual statement required of authorized insurers by s. 624.424
  185  and any rule adopted under this section, except for those lines
  186  identified as accident and health insurance and except for
  187  policies written under the National Flood Insurance Program. The
  188  assessment shall be specified as a percentage of direct written
  189  premium and is subject to annual adjustments by the board in
  190  order to meet debt obligations. The same percentage shall apply
  191  to all policies in lines of business subject to the assessment
  192  issued or renewed during the 12-month period beginning on the
  193  effective date of the assessment.
  194         2. A premium is not subject to an annual assessment under
  195  this paragraph in excess of 6 percent of premium with respect to
  196  obligations arising out of losses attributable to any one
  197  contract year, and a premium is not subject to an aggregate
  198  annual assessment under this paragraph in excess of 10 percent
  199  of premium. An annual assessment under this paragraph shall
  200  continue as long as the revenue bonds issued with respect to
  201  which the assessment was imposed are outstanding, including any
  202  bonds the proceeds of which were used to refund the revenue
  203  bonds, unless adequate provision has been made for the payment
  204  of the bonds under the documents authorizing issuance of the
  205  bonds.
  206         3. Emergency assessments shall be collected from
  207  policyholders. Emergency assessments shall be remitted by
  208  insurers as a percentage of direct written premium for the
  209  preceding calendar quarter as specified in the order from the
  210  Office of Insurance Regulation. The office shall verify the
  211  accurate and timely collection and remittance of emergency
  212  assessments and shall report the information to the board in a
  213  form and at a time specified by the board. Each insurer
  214  collecting assessments shall provide the information with
  215  respect to premiums and collections as may be required by the
  216  office to enable the office to monitor and verify compliance
  217  with this paragraph.
  218         4. With respect to assessments of surplus lines premiums,
  219  each surplus lines agent shall collect the assessment at the
  220  same time as the agent collects the surplus lines tax required
  221  by s. 626.932, and the surplus lines agent shall remit the
  222  assessment to the Florida Surplus Lines Service Office created
  223  by s. 626.921 at the same time as the agent remits the surplus
  224  lines tax to the Florida Surplus Lines Service Office. The
  225  emergency assessment on each insured procuring coverage and
  226  filing under s. 626.938 shall be remitted by the insured to the
  227  Florida Surplus Lines Service Office at the time the insured
  228  pays the surplus lines tax to the Florida Surplus Lines Service
  229  Office. The Florida Surplus Lines Service Office shall remit the
  230  collected assessments to the fund or corporation as provided in
  231  the order levied by the Office of Insurance Regulation. The
  232  Florida Surplus Lines Service Office shall verify the proper
  233  application of such emergency assessments and shall assist the
  234  board in ensuring the accurate and timely collection and
  235  remittance of assessments as required by the board. The Florida
  236  Surplus Lines Service Office shall annually calculate the
  237  aggregate written premium on property and casualty business,
  238  other than workers’ compensation and medical malpractice,
  239  procured through surplus lines agents and insureds procuring
  240  coverage and filing under s. 626.938 and shall report the
  241  information to the board in a form and at a time specified by
  242  the board.
  243         5. Any assessment authority not used for a particular
  244  contract year may be used for a subsequent contract year. If,
  245  for a subsequent contract year, the board determines that the
  246  amount of revenue produced under subsection (5) is insufficient
  247  to fund the obligations, costs, and expenses of the fund and the
  248  corporation, including repayment of revenue bonds and that
  249  portion of the debt service coverage not met by reimbursement
  250  premiums, the board shall direct the Office of Insurance
  251  Regulation to levy an emergency assessment up to an amount not
  252  exceeding the amount of unused assessment authority from a
  253  previous contract year or years, plus an additional 4 percent
  254  provided that the assessments in the aggregate do not exceed the
  255  limits specified in subparagraph 2.
  256         6. The assessments otherwise payable to the corporation
  257  under this paragraph shall be paid to the fund unless and until
  258  the Office of Insurance Regulation and the Florida Surplus Lines
  259  Service Office have received from the corporation and the fund a
  260  notice, which shall be conclusive and upon which they may rely
  261  without further inquiry, that the corporation has issued bonds
  262  and the fund has no agreements in effect with local governments
  263  under paragraph (c). On or after the date of the notice and
  264  until the date the corporation has no bonds outstanding, the
  265  fund shall have no right, title, or interest in or to the
  266  assessments, except as provided in the fund’s agreement with the
  267  corporation.
  268         7. Emergency assessments are not premium and are not
  269  subject to the premium tax, to the surplus lines tax, to any
  270  fees, or to any commissions. An insurer is liable for all
  271  assessments that it collects and must treat the failure of an
  272  insured to pay an assessment as a failure to pay the premium. An
  273  insurer is not liable for uncollectible assessments.
  274         8. When an insurer is required to return an unearned
  275  premium, it shall also return any collected assessment
  276  attributable to the unearned premium. A credit adjustment to the
  277  collected assessment may be made by the insurer with regard to
  278  future remittances that are payable to the fund or corporation,
  279  but the insurer is not entitled to a refund.
  280         9. When a surplus lines insured or an insured who has
  281  procured coverage and filed under s. 626.938 is entitled to the
  282  return of an unearned premium, the Florida Surplus Lines Service
  283  Office shall provide a credit or refund to the agent or such
  284  insured for the collected assessment attributable to the
  285  unearned premium prior to remitting the emergency assessment
  286  collected to the fund or corporation.
  287         10. The exemption of medical malpractice insurance premiums
  288  from emergency assessments under this paragraph is repealed May
  289  31, 2016 2013, and medical malpractice insurance premiums shall
  290  be subject to emergency assessments attributable to loss events
  291  occurring in the contract years commencing on June 1, 2016 2013.
  292         (d) State Board of Administration Florida Hurricane
  293  Catastrophe Fund Finance Corporation.—
  294         1. In addition to the findings and declarations in
  295  subsection (1), the Legislature also finds and declares that:
  296         a. The public benefits corporation created under this
  297  paragraph will provide a mechanism necessary for the cost
  298  effective and efficient issuance of bonds. This mechanism will
  299  eliminate unnecessary costs in the bond issuance process,
  300  thereby increasing the amounts available to pay reimbursement
  301  for losses to property sustained as a result of hurricane
  302  damage.
  303         b. The purpose of such bonds is to fund reimbursements
  304  through the Florida Hurricane Catastrophe Fund to pay for the
  305  costs of construction, reconstruction, repair, restoration, and
  306  other costs associated with damage to properties of
  307  policyholders of covered policies due to the occurrence of a
  308  hurricane.
  309         c. The efficacy of the financing mechanism will be enhanced
  310  by the corporation’s ownership of the assessments, by the
  311  insulation of the assessments from possible bankruptcy
  312  proceedings, and by covenants of the state with the
  313  corporation’s bondholders.
  314         2.a. There is created a public benefits corporation, which
  315  is an instrumentality of the state, to be known as the State
  316  Board of Administration Florida Hurricane Catastrophe Fund
  317  Finance Corporation.
  318         b. The corporation shall operate under a five-member board
  319  of directors consisting of the Governor or a designee, the Chief
  320  Financial Officer or a designee, the Attorney General or a
  321  designee, the director of the Division of Bond Finance of the
  322  State Board of Administration, and the Chief Operating Officer
  323  senior employee of the State Board of Administration responsible
  324  for operations of the Florida Hurricane Catastrophe Fund.
  325         c. The corporation has all of the powers of corporations
  326  under chapter 607 and under chapter 617, subject only to the
  327  provisions of this subsection.
  328         d. The corporation may issue bonds and engage in such other
  329  financial transactions as are necessary to provide sufficient
  330  funds to achieve the purposes of this section.
  331         e. The corporation may invest in any of the investments
  332  authorized under s. 215.47.
  333         f. There shall be no liability on the part of, and no cause
  334  of action shall arise against, any board members or employees of
  335  the corporation for any actions taken by them in the performance
  336  of their duties under this paragraph.
  337         3.a. In actions under chapter 75 to validate any bonds
  338  issued by the corporation, the notice required by s. 75.06 shall
  339  be published in two newspapers of general circulation in the
  340  state, and the complaint and order of the court shall be served
  341  only on the State Attorney of the Second Judicial Circuit.
  342         b. The state hereby covenants with holders of bonds of the
  343  corporation that the state will not repeal or abrogate the power
  344  of the board to direct the Office of Insurance Regulation to
  345  levy the assessments and to collect the proceeds of the revenues
  346  pledged to the payment of such bonds as long as any such bonds
  347  remain outstanding unless adequate provision has been made for
  348  the payment of such bonds pursuant to the documents authorizing
  349  the issuance of such bonds.
  350         4. The bonds of the corporation are not a debt of the state
  351  or of any political subdivision, and neither the state nor any
  352  political subdivision is liable on such bonds. The corporation
  353  does not have the power to pledge the credit, the revenues, or
  354  the taxing power of the state or of any political subdivision.
  355  The credit, revenues, or taxing power of the state or of any
  356  political subdivision shall not be deemed to be pledged to the
  357  payment of any bonds of the corporation.
  358         5.a. The property, revenues, and other assets of the
  359  corporation; the transactions and operations of the corporation
  360  and the income from such transactions and operations; and all
  361  bonds issued under this paragraph and interest on such bonds are
  362  exempt from taxation by the state and any political subdivision,
  363  including the intangibles tax under chapter 199 and the income
  364  tax under chapter 220. This exemption does not apply to any tax
  365  imposed by chapter 220 on interest, income, or profits on debt
  366  obligations owned by corporations other than the State Board of
  367  Administration Florida Hurricane Catastrophe Fund Finance
  368  Corporation.
  369         b. All bonds of the corporation shall be and constitute
  370  legal investments without limitation for all public bodies of
  371  this state; for all banks, trust companies, savings banks,
  372  savings associations, savings and loan associations, and
  373  investment companies; for all administrators, executors,
  374  trustees, and other fiduciaries; for all insurance companies and
  375  associations and other persons carrying on an insurance
  376  business; and for all other persons who are now or may hereafter
  377  be authorized to invest in bonds or other obligations of the
  378  state and shall be and constitute eligible securities to be
  379  deposited as collateral for the security of any state, county,
  380  municipal, or other public funds. This sub-subparagraph shall be
  381  considered as additional and supplemental authority and shall
  382  not be limited without specific reference to this sub
  383  subparagraph.
  384         6. The corporation and its corporate existence shall
  385  continue until terminated by law; however, no such law shall
  386  take effect as long as the corporation has bonds outstanding
  387  unless adequate provision has been made for the payment of such
  388  bonds pursuant to the documents authorizing the issuance of such
  389  bonds. Upon termination of the existence of the corporation, all
  390  of its rights and properties in excess of its obligations shall
  391  pass to and be vested in the state.
  392         7.The State Board of Administration Finance Corporation is
  393  for all purposes the successor to the Florida Hurricane
  394  Catastrophe Fund Finance Corporation.
  395         (16)TEMPORARY EMERGENCY OPTIONS FOR ADDITIONAL COVERAGE.—
  396         (a)Findings and intent.
  397         1.The Legislature finds that:
  398         a.Because of temporary disruptions in the market for
  399  catastrophic reinsurance, many property insurers were unable to
  400  procure reinsurance for the 2006 hurricane season with an
  401  attachment point below the insurers’ respective Florida
  402  Hurricane Catastrophe Fund attachment points, were unable to
  403  procure sufficient amounts of such reinsurance, or were able to
  404  procure such reinsurance only by incurring substantially higher
  405  costs than in prior years.
  406         b.The reinsurance market problems were responsible, at
  407  least in part, for substantial premium increases to many
  408  consumers and increases in the number of policies issued by the
  409  Citizens Property Insurance Corporation.
  410         c.It is likely that the reinsurance market disruptions
  411  will not significantly abate prior to the 2007 hurricane season.
  412         2.It is the intent of the Legislature to create a
  413  temporary emergency program, applicable to the 2007, 2008, and
  414  2009 hurricane seasons, to address these market disruptions and
  415  enable insurers, at their option, to procure additional coverage
  416  from the Florida Hurricane Catastrophe Fund.
  417         (b)Applicability of other provisions of this section.—All
  418  provisions of this section and the rules adopted under this
  419  section apply to the program created by this subsection unless
  420  specifically superseded by this subsection.
  421         (c)Optional coverage.—For the contract year commencing
  422  June 1, 2007, and ending May 31, 2008, the contract year
  423  commencing June 1, 2008, and ending May 31, 2009, and the
  424  contract year commencing June 1, 2009, and ending May 31, 2010,
  425  the board shall offer for each of such years the optional
  426  coverage as provided in this subsection.
  427         (d)Additional definitions.—As used in this subsection, the
  428  term:
  429         1.“TEACO options” means the temporary emergency additional
  430  coverage options created under this subsection.
  431         2.“TEACO insurer” means an insurer that has opted to
  432  obtain coverage under the TEACO options in addition to the
  433  coverage provided to the insurer under its reimbursement
  434  contract.
  435         3.“TEACO reimbursement premium” means the premium charged
  436  by the fund for coverage provided under the TEACO options.
  437         4.“TEACO retention” means the amount of losses below which
  438  a TEACO insurer is not entitled to reimbursement from the fund
  439  under the TEACO option selected. A TEACO insurer’s retention
  440  options shall be calculated as follows:
  441         a.The board shall calculate and report to each TEACO
  442  insurer the TEACO retention multiples. There shall be three
  443  TEACO retention multiples for defining coverage. Each multiple
  444  shall be calculated by dividing $3 billion, $4 billion, or $5
  445  billion by the total estimated mandatory FHCF reimbursement
  446  premium assuming all insurers selected the 90-percent coverage
  447  level.
  448         b.The TEACO retention multiples as determined under sub
  449  subparagraph a. shall be adjusted to reflect the coverage level
  450  elected by the insurer. For insurers electing the 90-percent
  451  coverage level, the adjusted retention multiple is 100 percent
  452  of the amount determined under sub-subparagraph a. For insurers
  453  electing the 75-percent coverage level, the retention multiple
  454  is 120 percent of the amount determined under sub-subparagraph
  455  a. For insurers electing the 45-percent coverage level, the
  456  adjusted retention multiple is 200 percent of the amount
  457  determined under sub-subparagraph a.
  458         c.An insurer shall determine its provisional TEACO
  459  retention by multiplying its estimated mandatory FHCF
  460  reimbursement premium by the applicable adjusted TEACO retention
  461  multiple and shall determine its actual TEACO retention by
  462  multiplying its actual mandatory FHCF reimbursement premium by
  463  the applicable adjusted TEACO retention multiple.
  464         d.For TEACO insurers who experience multiple covered
  465  events causing loss during the contract year, the insurer’s full
  466  TEACO retention shall be applied to each of the covered events
  467  causing the two largest losses for that insurer. For other
  468  covered events resulting in losses, the TEACO option does not
  469  apply and the insurer’s retention shall be one-third of the full
  470  retention as calculated under paragraph (2)(e).
  471         5.“TEACO addendum” means an addendum to the reimbursement
  472  contract reflecting the obligations of the fund and TEACO
  473  insurers under the program created by this subsection.
  474         6.“FHCF” means the Florida Hurricane Catastrophe Fund.
  475         (e)TEACO addendum.
  476         1.The TEACO addendum shall provide for reimbursement of
  477  TEACO insurers for covered events occurring during the contract
  478  year, in exchange for the TEACO reimbursement premium paid into
  479  the fund under paragraph (f). Any insurer writing covered
  480  policies has the option of choosing to accept the TEACO addendum
  481  for any of the 3 contract years that the coverage is offered.
  482         2.The TEACO addendum shall contain a promise by the board
  483  to reimburse the TEACO insurer for 45 percent, 75 percent, or 90
  484  percent of its losses from each covered event in excess of the
  485  insurer’s TEACO retention, plus 5 percent of the reimbursed
  486  losses to cover loss adjustment expenses. The percentage shall
  487  be the same as the coverage level selected by the insurer under
  488  paragraph (4)(b).
  489         3.The TEACO addendum shall provide that reimbursement
  490  amounts shall not be reduced by reinsurance paid or payable to
  491  the insurer from other sources.
  492         4.The TEACO addendum shall also provide that the
  493  obligation of the board with respect to all TEACO addenda shall
  494  not exceed an amount equal to two times the difference between
  495  the industry retention level calculated under paragraph (2)(e)
  496  and the $3 billion, $4 billion, or $5 billion industry TEACO
  497  retention level options actually selected, but in no event may
  498  the board’s obligation exceed the actual claims-paying capacity
  499  of the fund plus the additional capacity created in paragraph
  500  (g). If the actual claims-paying capacity and the additional
  501  capacity created under paragraph (g) fall short of the board’s
  502  obligations under the reimbursement contract, each insurer’s
  503  share of the fund’s capacity shall be prorated based on the
  504  premium an insurer pays for its mandatory reimbursement coverage
  505  and the premium paid for its optional TEACO coverage as each
  506  such premium bears to the total premiums paid to the fund times
  507  the available capacity.
  508         5.The priorities, schedule, and method of reimbursements
  509  under the TEACO addendum shall be the same as provided under
  510  subsection (4).
  511         6.A TEACO insurer’s maximum reimbursement for a single
  512  event shall be equal to the product of multiplying its mandatory
  513  FHCF premium by the difference between its FHCF retention
  514  multiple and its TEACO retention multiple under the TEACO option
  515  selected and by the coverage selected under paragraph (4)(b),
  516  plus an additional 5 percent for loss adjustment expenses. A
  517  TEACO insurer’s maximum reimbursement under the TEACO option
  518  selected for a TEACO insurer’s two largest events shall be twice
  519  its maximum reimbursement for a single event.
  520         (f)TEACO reimbursement premiums.
  521         1.Each TEACO insurer shall pay to the fund, in the manner
  522  and at the time provided in the reimbursement contract for
  523  payment of reimbursement premiums, a TEACO reimbursement premium
  524  calculated as specified in this paragraph.
  525         2.The insurer’s TEACO reimbursement premium associated
  526  with the $3 billion retention option shall be equal to 85
  527  percent of a TEACO insurer’s maximum reimbursement for a single
  528  event as calculated under subparagraph (e)6. The TEACO
  529  reimbursement premium associated with the $4 billion retention
  530  option shall be equal to 80 percent of a TEACO insurer’s maximum
  531  reimbursement for a single event as calculated under
  532  subparagraph (e)6. The TEACO premium associated with the $5
  533  billion retention option shall be equal to 75 percent of a TEACO
  534  insurer’s maximum reimbursement for a single event as calculated
  535  under subparagraph (e)6.
  536         (g)Effect on claims-paying capacity of the fund.—For the
  537  contract term commencing June 1, 2007, the contract year
  538  commencing June 1, 2008, and the contract term beginning June 1,
  539  2009, the program created by this subsection shall increase the
  540  claims-paying capacity of the fund as provided in subparagraph
  541  (4)(c)1. by an amount equal to two times the difference between
  542  the industry retention level calculated under paragraph (2)(e)
  543  and the $3 billion industry TEACO retention level specified in
  544  sub-subparagraph (d)4.a. The additional capacity shall apply
  545  only to the additional coverage provided by the TEACO option and
  546  shall not otherwise affect any insurer’s reimbursement from the
  547  fund.
  548         Section 2. Subsection (4) of section 626.752, Florida
  549  Statutes, is amended to read:
  550         626.752 Exchange of business.—
  551         (4) The foregoing limitations and restrictions shall not be
  552  construed and shall not apply to the placing of surplus lines
  553  business under the provisions of part VIII or to the activities
  554  of Citizens Property Insurance Corporation in placing new and
  555  renewal business with authorized insurers in accordance with s.
  556  627.3518.
  557         Section 3. Present subsections (11), (15), and (17) of
  558  section 626.854, Florida Statutes, are amended, and a new
  559  subsection (17) is added to that section to read:
  560         626.854 “Public adjuster” defined; prohibitions.—The
  561  Legislature finds that it is necessary for the protection of the
  562  public to regulate public insurance adjusters and to prevent the
  563  unauthorized practice of law.
  564         (11)(a) If a public adjuster enters into a contract with an
  565  insured or claimant to reopen a claim or file a supplemental
  566  claim that seeks additional payments for a claim that has been
  567  previously paid in part or in full or settled by the insurer,
  568  the public adjuster may not charge, agree to, or accept from any
  569  source any compensation, payment, commission, fee, or any other
  570  thing of value based on a previous settlement or previous claim
  571  payments by the insurer for the same cause of loss. The charge,
  572  compensation, payment, commission, fee, or any other thing of
  573  value must be based only on the claim payments or settlement
  574  obtained through the work of the public adjuster after entering
  575  into the contract with the insured or claimant. Compensation for
  576  the reopened or supplemental claim may not exceed 20 percent of
  577  the reopened or supplemental claim payment. In no event shall
  578  the contracts described in this paragraph exceed are not subject
  579  to the limitations in paragraph (b).
  580         (b) A public adjuster may not charge, agree to, or accept
  581  from any source any compensation, payment, commission, fee, or
  582  any other thing of value in excess of:
  583         1. Ten percent of the amount of insurance claim payments
  584  made by the insurer for claims based on events that are the
  585  subject of a declaration of a state of emergency by the
  586  Governor. This provision applies to claims made during the year
  587  after the declaration of emergency. After that year, the
  588  limitations in subparagraph 2. apply.
  589         2. Twenty percent of the amount of insurance claim payments
  590  made by the insurer for claims that are not based on events that
  591  are the subject of a declaration of a state of emergency by the
  592  Governor.
  593         (c)Any maneuver, shift, or device through which the limits
  594  on compensation set forth in this subsection are exceeded is a
  595  violation of this chapter punishable as provided under s.
  596  626.8698.
  597         (15) A public adjuster must ensure prompt notice of
  598  property loss claims submitted to an insurer by or through a
  599  public adjuster or on which a public adjuster represents the
  600  insured at the time the claim or notice of loss is submitted to
  601  the insurer. The public adjuster must ensure that prompt notice
  602  is given of the claim to the insurer, the public adjuster’s
  603  contract is provided to the insurer, the property is available
  604  for inspection of the loss or damage by the insurer, and the
  605  insurer is given an opportunity to interview the insured
  606  directly about the loss and claim. The insurer must be allowed
  607  to obtain necessary information to investigate and respond to
  608  the claim.
  609         (a) The insurer may not exclude the public adjuster from
  610  its in-person meetings with the insured. The insurer shall meet
  611  or communicate with the public adjuster in an effort to reach
  612  agreement as to the scope of the covered loss under the
  613  insurance policy. The public adjuster shall meet or communicate
  614  with the insurer in an effort to reach agreement as to the scope
  615  of the covered loss under the insurance policy. This section
  616  does not impair the terms and conditions of the insurance policy
  617  in effect at the time the claim is filed.
  618         (b) A public adjuster may not restrict or prevent an
  619  insurer, company employee adjuster, independent adjuster,
  620  attorney, investigator, or other person acting on behalf of the
  621  insurer from having reasonable access at reasonable times to any
  622  an insured or claimant or to the insured property that is the
  623  subject of a claim.
  624         (c) A public adjuster may not act or fail to reasonably act
  625  in any manner that obstructs or prevents an insurer or insurer’s
  626  adjuster from timely conducting an inspection of any part of the
  627  insured property for which there is a claim for loss or damage.
  628  The public adjuster representing the insureds insured may be
  629  present for the insurer’s inspection, but if the unavailability
  630  of the public adjuster otherwise delays the insurer’s timely
  631  inspection of the property, the public adjuster or the insureds
  632  insured must allow the insurer to have access to the property
  633  without the participation or presence of the public adjuster or
  634  insureds insured in order to facilitate the insurer’s prompt
  635  inspection of the loss or damage.
  636         (17)A public adjuster shall not acquire any interest in
  637  salvaged property, except with the written consent and
  638  permission of the insured through a signed affidavit.
  639         (18)(17) The provisions of subsections (5)-(17) (5)-(16)
  640  apply only to residential property insurance policies and
  641  condominium unit owner policies as defined in s. 718.111(11).
  642         Section 4. The Legislature intends to enhance the expertise
  643  immediately available to the commission by increasing the
  644  membership of the Florida Commission on Hurricane Loss
  645  Projection Methodology to provide for the appointment of an
  646  additional member with special qualifications or attributes.
  647         Section 5. Subsection (2) of section 627.0628, Florida
  648  Statutes, is amended to read:
  649         627.0628 Florida Commission on Hurricane Loss Projection
  650  Methodology; public records exemption; public meetings
  651  exemption.—
  652         (2) COMMISSION CREATED.—
  653         (a) There is created the Florida Commission on Hurricane
  654  Loss Projection Methodology, which is assigned to the State
  655  Board of Administration. For the purposes of this section, the
  656  term “commission” means the Florida Commission on Hurricane Loss
  657  Projection Methodology. The commission shall be administratively
  658  housed within the State Board of Administration, but it shall
  659  independently exercise the powers and duties specified in this
  660  section.
  661         (b) The commission shall consist of the following 12 11
  662  members:
  663         1. The insurance consumer advocate.
  664         2. The senior employee of the State Board of Administration
  665  responsible for operations of the Florida Hurricane Catastrophe
  666  Fund.
  667         3. The Executive Director of the Citizens Property
  668  Insurance Corporation.
  669         4. The Director of the Division of Emergency Management.
  670         5. The actuary member of the Florida Hurricane Catastrophe
  671  Fund Advisory Council.
  672         6. An employee of the office who is an actuary responsible
  673  for property insurance rate filings and who is appointed by the
  674  director of the office.
  675         7. Five members appointed by the Chief Financial Officer,
  676  as follows:
  677         a. An actuary who is employed full time by a property and
  678  casualty insurer that was responsible for at least 1 percent of
  679  the aggregate statewide direct written premium for homeowner’s
  680  insurance in the calendar year preceding the member’s
  681  appointment to the commission.
  682         b. An expert in insurance finance who is a full-time member
  683  of the faculty of the State University System and who has a
  684  background in actuarial science.
  685         c. An expert in statistics who is a full-time member of the
  686  faculty of the State University System and who has a background
  687  in insurance.
  688         d. An expert in computer system design who is a full-time
  689  member of the faculty of the State University System.
  690         e. An expert in meteorology who is a full-time member of
  691  the faculty of the State University System and who specializes
  692  in hurricanes.
  693         8.A licensed professional structural engineer who is a
  694  full-time faculty member in the State University System and who
  695  has expertise in wind mitigation techniques. This appointment
  696  shall be made by the Governor.
  697         (c) Members designated under subparagraphs (b)1.-5. shall
  698  serve on the commission as long as they maintain the respective
  699  offices designated in subparagraphs (b)1.-5. The member
  700  appointed by the director of the office under subparagraph (b)6.
  701  shall serve on the commission until the end of the term of
  702  office of the director who appointed him or her, unless removed
  703  earlier by the director for cause. Members appointed by the
  704  Chief Financial Officer under subparagraph (b)7. shall serve on
  705  the commission until the end of the term of office of the Chief
  706  Financial Officer who appointed them, unless earlier removed by
  707  the Chief Financial Officer for cause. Vacancies on the
  708  commission shall be filled in the same manner as the original
  709  appointment.
  710         (d) The State Board of Administration shall annually
  711  appoint one of the members of the commission to serve as chair.
  712         (e) Members of the commission shall serve without
  713  compensation, but shall be reimbursed for per diem and travel
  714  expenses pursuant to s. 112.061.
  715         (f) The State Board of Administration shall, as a cost of
  716  administration of the Florida Hurricane Catastrophe Fund,
  717  provide for travel, expenses, and staff support for the
  718  commission.
  719         (g) There shall be no liability on the part of, and no
  720  cause of action of any nature shall arise against, any member of
  721  the commission, any member of the State Board of Administration,
  722  or any employee of the State Board of Administration for any
  723  action taken in the performance of their duties under this
  724  section. In addition, the commission may, in writing, waive any
  725  potential cause of action for negligence of a consultant,
  726  contractor, or contract employee engaged to assist the
  727  commission.
  728         Section 6. Subsection (5) of section 627.0629, Florida
  729  Statutes, is amended to read:
  730         627.0629 Residential property insurance; rate filings.—
  731         (5) In order to provide an appropriate transition period,
  732  an insurer may implement an approved rate filing for residential
  733  property insurance over a period of years. Such insurer must
  734  provide an informational notice to the office setting out its
  735  schedule for implementation of the phased-in rate filing. The
  736  insurer may include in its rate the actual cost of private
  737  market reinsurance that corresponds to available coverage of the
  738  Temporary Increase in Coverage Limits, TICL, from the Florida
  739  Hurricane Catastrophe Fund. The insurer may also include the
  740  cost of reinsurance to replace the TICL reduction implemented
  741  pursuant to s. 215.555(16)(d)9. 215.555(17)(d)9. However, this
  742  cost for reinsurance may not include any expense or profit load
  743  or result in a total annual base rate increase in excess of 10
  744  percent.
  745         Section 7. Paragraphs (a), (c), (i), (k), and (q) of
  746  subsection (6) of section 627.351, Florida Statutes, are
  747  amended, and paragraphs (gg) and (hh) are added to that
  748  subsection, to read:
  749         627.351 Insurance risk apportionment plans.—
  750         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
  751         (a) The public purpose of this subsection is to ensure that
  752  there is an orderly market for property insurance for residents
  753  and businesses of this state.
  754         1. The Legislature finds that private insurers are
  755  unwilling or unable to provide affordable property insurance
  756  coverage in this state to the extent sought and needed. The
  757  absence of affordable property insurance threatens the public
  758  health, safety, and welfare and likewise threatens the economic
  759  health of the state. The state therefore has a compelling public
  760  interest and a public purpose to assist in assuring that
  761  property in the state is insured and that it is insured at
  762  affordable rates so as to facilitate the remediation,
  763  reconstruction, and replacement of damaged or destroyed property
  764  in order to reduce or avoid the negative effects otherwise
  765  resulting to the public health, safety, and welfare, to the
  766  economy of the state, and to the revenues of the state and local
  767  governments which are needed to provide for the public welfare.
  768  It is necessary, therefore, to provide affordable property
  769  insurance to applicants who are in good faith entitled to
  770  procure insurance through the voluntary market but are unable to
  771  do so. The Legislature intends, therefore, that affordable
  772  property insurance be provided and that it continue to be
  773  provided, as long as necessary, through Citizens Property
  774  Insurance Corporation, a government entity that is an integral
  775  part of the state, and that is not a private insurance company.
  776  To that end, the corporation shall strive to increase the
  777  availability of affordable property insurance in this state,
  778  while achieving efficiencies and economies, and while providing
  779  service to policyholders, applicants, and agents which is no
  780  less than the quality generally provided in the voluntary
  781  market, for the achievement of the foregoing public purposes.
  782  Because it is essential for this government entity to have the
  783  maximum financial resources to pay claims following a
  784  catastrophic hurricane, it is the intent of the Legislature that
  785  the corporation continue to be an integral part of the state and
  786  that the income of the corporation be exempt from federal income
  787  taxation and that interest on the debt obligations issued by the
  788  corporation be exempt from federal income taxation.
  789         2. The Residential Property and Casualty Joint Underwriting
  790  Association originally created by this statute shall be known as
  791  the Citizens Property Insurance Corporation. The corporation
  792  shall provide insurance for residential and commercial property,
  793  for applicants who are entitled, but, in good faith, are unable
  794  to procure insurance through the voluntary market. The
  795  corporation shall operate pursuant to a plan of operation
  796  approved by order of the Financial Services Commission. The plan
  797  is subject to continuous review by the commission. The
  798  commission may, by order, withdraw approval of all or part of a
  799  plan if the commission determines that conditions have changed
  800  since approval was granted and that the purposes of the plan
  801  require changes in the plan. For the purposes of this
  802  subsection, residential coverage includes both personal lines
  803  residential coverage, which consists of the type of coverage
  804  provided by homeowner’s, mobile home owner’s, dwelling,
  805  tenant’s, condominium unit owner’s, and similar policies; and
  806  commercial lines residential coverage, which consists of the
  807  type of coverage provided by condominium association, apartment
  808  building, and similar policies.
  809         3. With respect to coverage for personal lines residential
  810  structures:
  811         a. Effective January 1, 2014 2009, a personal lines
  812  residential structure that has a dwelling replacement cost of $1
  813  $2 million or more, or a single condominium unit that has a
  814  combined dwelling and contents replacement cost of $1 $2 million
  815  or more is not eligible for coverage by the corporation. Such
  816  dwellings insured by the corporation on December 31, 2013 2008,
  817  may continue to be covered by the corporation until the end of
  818  the policy term. However, such dwellings may reapply and obtain
  819  coverage if the property owner provides the corporation with a
  820  sworn affidavit from one or more insurance agents, on a form
  821  provided by the corporation, stating that the agents have made
  822  their best efforts to obtain coverage and that the property has
  823  been rejected for coverage by at least one authorized insurer
  824  and at least three surplus lines insurers. If such conditions
  825  are met, the dwelling may be insured by the corporation for up
  826  to 3 years, after which time the dwelling is ineligible for
  827  coverage. The office shall approve the method used by the
  828  corporation for valuing the dwelling replacement cost for the
  829  purposes of this subparagraph. If a policyholder is insured by
  830  the corporation before prior to being determined to be
  831  ineligible pursuant to this subparagraph and such policyholder
  832  files a lawsuit challenging the determination, the policyholder
  833  may remain insured by the corporation until the conclusion of
  834  the litigation.
  835         b.Effective January 1, 2015, a structure that has a
  836  dwelling replacement cost of $900,000 or more, or a single
  837  condominium unit that has a combined dwelling and contents
  838  replacement cost of $900,000 or more, is not eligible for
  839  coverage by the corporation. Such dwellings insured by the
  840  corporation on December 31, 2014, may continue to be covered by
  841  the corporation only until the end of the policy term.
  842         c.Effective January 1, 2016, a structure that has a
  843  dwelling replacement cost of $800,000 or more, or a single
  844  condominium unit that has a combined dwelling and contents
  845  replacement cost of $800,000 or more, is not eligible for
  846  coverage by the corporation. Such dwellings insured by the
  847  corporation on December 31, 2015, may continue to be covered by
  848  the corporation until the end of the policy term.
  849         d.Effective January 1, 2017, a structure that has a
  850  dwelling replacement cost of $700,000 or more, or a single
  851  condominium unit that has a combined dwelling and contents
  852  replacement cost of $700,000 or more, is not eligible for
  853  coverage by the corporation. Such dwellings insured by the
  854  corporation on December 31, 2016, may continue to be covered by
  855  the corporation until the end of the policy term.
  856  
  857  The requirements of sub-subparagraphs b.-d. do not apply in
  858  counties where the office determines there is not a reasonable
  859  degree of competition. In such counties a personal lines
  860  residential structure that has a dwelling replacement cost of
  861  less than $1 million, or a single condominium unit that has a
  862  combined dwelling and contents replacement cost of less than $1
  863  million, is eligible for coverage by the corporation.
  864         4. It is the intent of the Legislature that policyholders,
  865  applicants, and agents of the corporation receive service and
  866  treatment of the highest possible level but never less than that
  867  generally provided in the voluntary market. It is also intended
  868  that the corporation be held to service standards no less than
  869  those applied to insurers in the voluntary market by the office
  870  with respect to responsiveness, timeliness, customer courtesy,
  871  and overall dealings with policyholders, applicants, or agents
  872  of the corporation.
  873         5.a. Effective January 1, 2009, a personal lines
  874  residential structure that is located in the “wind-borne debris
  875  region,” as defined in s. 1609.2, International Building Code
  876  (2006), and that has an insured value on the structure of
  877  $750,000 or more is not eligible for coverage by the corporation
  878  unless the structure has opening protections as required under
  879  the Florida Building Code for a newly constructed residential
  880  structure in that area. A residential structure is shall be
  881  deemed to comply with this subparagraph if it has shutters or
  882  opening protections on all openings and if such opening
  883  protections complied with the Florida Building Code at the time
  884  they were installed.
  885         b.Any major structure as defined in s. 161.54(6)(a) for
  886  which a permit is applied on or after July 1, 2014, for new
  887  construction or substantial improvement as defined in s.
  888  161.54(12) is not eligible for coverage by the corporation if
  889  the structure is seaward of the coastal construction control
  890  line established pursuant to s. 161.053 or is within the Coastal
  891  Barrier Resources System as designated by 16 U.S.C. ss. 3501
  892  3510.
  893         6.For any claim filed under any policy of the corporation,
  894  a public adjuster may not charge, agree to, or accept any
  895  compensation, payment, commission, fee, or other thing of value
  896  greater than 10 percent of the additional amount actually paid
  897  over the amount that was originally offered by the corporation
  898  for any one claim.
  899         (c) The corporation’s plan of operation:
  900         1. Must provide for adoption of residential property and
  901  casualty insurance policy forms and commercial residential and
  902  nonresidential property insurance forms, which must be approved
  903  by the office before use. The corporation shall adopt the
  904  following policy forms:
  905         a. Standard personal lines policy forms that are
  906  comprehensive multiperil policies providing full coverage of a
  907  residential property equivalent to the coverage provided in the
  908  private insurance market under an HO-3, HO-4, or HO-6 policy.
  909         b. Basic personal lines policy forms that are policies
  910  similar to an HO-8 policy or a dwelling fire policy that provide
  911  coverage meeting the requirements of the secondary mortgage
  912  market, but which is more limited than the coverage under a
  913  standard policy.
  914         c. Commercial lines residential and nonresidential policy
  915  forms that are generally similar to the basic perils of full
  916  coverage obtainable for commercial residential structures and
  917  commercial nonresidential structures in the admitted voluntary
  918  market.
  919         d. Personal lines and commercial lines residential property
  920  insurance forms that cover the peril of wind only. The forms are
  921  applicable only to residential properties located in areas
  922  eligible for coverage under the coastal account referred to in
  923  sub-subparagraph (b)2.a.
  924         e. Commercial lines nonresidential property insurance forms
  925  that cover the peril of wind only. The forms are applicable only
  926  to nonresidential properties located in areas eligible for
  927  coverage under the coastal account referred to in sub
  928  subparagraph (b)2.a.
  929         f. The corporation may adopt variations of the policy forms
  930  listed in sub-subparagraphs a.-e. which contain more restrictive
  931  coverage.
  932         g. Effective January 1, 2013, the corporation shall offer a
  933  basic personal lines policy similar to an HO-8 policy with
  934  dwelling repair based on common construction materials and
  935  methods.
  936         2. Must provide that the corporation adopt a program in
  937  which the corporation and authorized insurers enter into quota
  938  share primary insurance agreements for hurricane coverage, as
  939  defined in s. 627.4025(2)(a), for eligible risks, and adopt
  940  property insurance forms for eligible risks which cover the
  941  peril of wind only.
  942         a. As used in this subsection, the term:
  943         (I) “Quota share primary insurance” means an arrangement in
  944  which the primary hurricane coverage of an eligible risk is
  945  provided in specified percentages by the corporation and an
  946  authorized insurer. The corporation and authorized insurer are
  947  each solely responsible for a specified percentage of hurricane
  948  coverage of an eligible risk as set forth in a quota share
  949  primary insurance agreement between the corporation and an
  950  authorized insurer and the insurance contract. The
  951  responsibility of the corporation or authorized insurer to pay
  952  its specified percentage of hurricane losses of an eligible
  953  risk, as set forth in the agreement, may not be altered by the
  954  inability of the other party to pay its specified percentage of
  955  losses. Eligible risks that are provided hurricane coverage
  956  through a quota share primary insurance arrangement must be
  957  provided policy forms that set forth the obligations of the
  958  corporation and authorized insurer under the arrangement,
  959  clearly specify the percentages of quota share primary insurance
  960  provided by the corporation and authorized insurer, and
  961  conspicuously and clearly state that the authorized insurer and
  962  the corporation may not be held responsible beyond their
  963  specified percentage of coverage of hurricane losses.
  964         (II) “Eligible risks” means personal lines residential and
  965  commercial lines residential risks that meet the underwriting
  966  criteria of the corporation and are located in areas that were
  967  eligible for coverage by the Florida Windstorm Underwriting
  968  Association on January 1, 2002.
  969         b. The corporation may enter into quota share primary
  970  insurance agreements with authorized insurers at corporation
  971  coverage levels of 90 percent and 50 percent.
  972         c. If the corporation determines that additional coverage
  973  levels are necessary to maximize participation in quota share
  974  primary insurance agreements by authorized insurers, the
  975  corporation may establish additional coverage levels. However,
  976  the corporation’s quota share primary insurance coverage level
  977  may not exceed 90 percent.
  978         d. Any quota share primary insurance agreement entered into
  979  between an authorized insurer and the corporation must provide
  980  for a uniform specified percentage of coverage of hurricane
  981  losses, by county or territory as set forth by the corporation
  982  board, for all eligible risks of the authorized insurer covered
  983  under the agreement.
  984         e. Any quota share primary insurance agreement entered into
  985  between an authorized insurer and the corporation is subject to
  986  review and approval by the office. However, such agreement shall
  987  be authorized only as to insurance contracts entered into
  988  between an authorized insurer and an insured who is already
  989  insured by the corporation for wind coverage.
  990         f. For all eligible risks covered under quota share primary
  991  insurance agreements, the exposure and coverage levels for both
  992  the corporation and authorized insurers shall be reported by the
  993  corporation to the Florida Hurricane Catastrophe Fund. For all
  994  policies of eligible risks covered under such agreements, the
  995  corporation and the authorized insurer must maintain complete
  996  and accurate records for the purpose of exposure and loss
  997  reimbursement audits as required by fund rules. The corporation
  998  and the authorized insurer shall each maintain duplicate copies
  999  of policy declaration pages and supporting claims documents.
 1000         g. The corporation board shall establish in its plan of
 1001  operation standards for quota share agreements which ensure that
 1002  there is no discriminatory application among insurers as to the
 1003  terms of the agreements, pricing of the agreements, incentive
 1004  provisions if any, and consideration paid for servicing policies
 1005  or adjusting claims.
 1006         h. The quota share primary insurance agreement between the
 1007  corporation and an authorized insurer must set forth the
 1008  specific terms under which coverage is provided, including, but
 1009  not limited to, the sale and servicing of policies issued under
 1010  the agreement by the insurance agent of the authorized insurer
 1011  producing the business, the reporting of information concerning
 1012  eligible risks, the payment of premium to the corporation, and
 1013  arrangements for the adjustment and payment of hurricane claims
 1014  incurred on eligible risks by the claims adjuster and personnel
 1015  of the authorized insurer. Entering into a quota sharing
 1016  insurance agreement between the corporation and an authorized
 1017  insurer is voluntary and at the discretion of the authorized
 1018  insurer.
 1019         3.a. May provide that the corporation may employ or
 1020  otherwise contract with individuals or other entities to provide
 1021  administrative or professional services that may be appropriate
 1022  to effectuate the plan. The corporation may borrow funds by
 1023  issuing bonds or by incurring other indebtedness, and shall have
 1024  other powers reasonably necessary to effectuate the requirements
 1025  of this subsection, including, without limitation, the power to
 1026  issue bonds and incur other indebtedness in order to refinance
 1027  outstanding bonds or other indebtedness. The corporation may
 1028  seek judicial validation of its bonds or other indebtedness
 1029  under chapter 75. The corporation may issue bonds or incur other
 1030  indebtedness, or have bonds issued on its behalf by a unit of
 1031  local government pursuant to subparagraph (q)2. in the absence
 1032  of a hurricane or other weather-related event, upon a
 1033  determination by the corporation, subject to approval by the
 1034  office, that such action would enable it to efficiently meet the
 1035  financial obligations of the corporation and that such
 1036  financings are reasonably necessary to effectuate the
 1037  requirements of this subsection. The corporation may take all
 1038  actions needed to facilitate tax-free status for such bonds or
 1039  indebtedness, including formation of trusts or other affiliated
 1040  entities. The corporation may pledge assessments, projected
 1041  recoveries from the Florida Hurricane Catastrophe Fund, other
 1042  reinsurance recoverables, policyholder surcharges and other
 1043  surcharges, and other funds available to the corporation as
 1044  security for bonds or other indebtedness. In recognition of s.
 1045  10, Art. I of the State Constitution, prohibiting the impairment
 1046  of obligations of contracts, it is the intent of the Legislature
 1047  that no action be taken whose purpose is to impair any bond
 1048  indenture or financing agreement or any revenue source committed
 1049  by contract to such bond or other indebtedness.
 1050         b. To ensure that the corporation is operating in an
 1051  efficient and economic manner while providing quality service to
 1052  policyholders, applicants, and agents, the board shall
 1053  commission an independent third-party consultant having
 1054  expertise in insurance company management or insurance company
 1055  management consulting to prepare a report and make
 1056  recommendations on the relative costs and benefits of
 1057  outsourcing various policy issuance and service functions to
 1058  private servicing carriers or entities performing similar
 1059  functions in the private market for a fee, rather than
 1060  performing such functions in-house. In making such
 1061  recommendations, the consultant shall consider how other
 1062  residual markets, both in this state and around the country,
 1063  outsource appropriate functions or use servicing carriers to
 1064  better match expenses with revenues that fluctuate based on a
 1065  widely varying policy count. The report must be completed by
 1066  July 1, 2012. Upon receiving the report, the board shall develop
 1067  a plan to implement the report and submit the plan for review,
 1068  modification, and approval to the Financial Services Commission.
 1069  Upon the commission’s approval of the plan, the board shall
 1070  begin implementing the plan by January 1, 2013.
 1071         4. Must require that the corporation operate subject to the
 1072  supervision and approval of a board of governors consisting of
 1073  nine eight individuals who are residents of this state and who
 1074  are, from different geographical areas of the this state, one of
 1075  whom is appointed by the Governor and serves solely to advocate
 1076  on behalf of the consumer. The appointment of a consumer
 1077  representative by the Governor is in addition to the
 1078  appointments authorized under sub-subparagraph a.
 1079         a. The Governor, the Chief Financial Officer, the President
 1080  of the Senate, and the Speaker of the House of Representatives
 1081  shall each appoint two members of the board. At least one of the
 1082  two members appointed by each appointing officer must have
 1083  demonstrated expertise in insurance and is deemed to be within
 1084  the scope of the exemption provided in s. 112.313(7)(b). The
 1085  Chief Financial Officer shall designate one of the appointees as
 1086  chair. All board members serve at the pleasure of the appointing
 1087  officer. All members of the board are subject to removal at will
 1088  by the officers who appointed them. All board members, including
 1089  the chair, must be appointed to serve for 3-year terms beginning
 1090  annually on a date designated by the plan. However, for the
 1091  first term beginning on or after July 1, 2009, each appointing
 1092  officer shall appoint one member of the board for a 2-year term
 1093  and one member for a 3-year term. A board vacancy shall be
 1094  filled for the unexpired term by the appointing officer. The
 1095  Chief Financial Officer shall appoint a technical advisory group
 1096  to provide information and advice to the board in connection
 1097  with the board’s duties under this subsection. The executive
 1098  director and senior managers of the corporation shall be engaged
 1099  by the board and serve at the pleasure of the board. Any
 1100  executive director appointed on or after July 1, 2006, is
 1101  subject to confirmation by the Senate. The executive director is
 1102  responsible for employing other staff as the corporation may
 1103  require, subject to review and concurrence by the board.
 1104         b. The board shall create a Market Accountability Advisory
 1105  Committee to assist the corporation in developing awareness of
 1106  its rates and its customer and agent service levels in
 1107  relationship to the voluntary market insurers writing similar
 1108  coverage.
 1109         (I) The members of the advisory committee consist of the
 1110  following 11 persons, one of whom must be elected chair by the
 1111  members of the committee: four representatives, one appointed by
 1112  the Florida Association of Insurance Agents, one by the Florida
 1113  Association of Insurance and Financial Advisors, one by the
 1114  Professional Insurance Agents of Florida, and one by the Latin
 1115  American Association of Insurance Agencies; three
 1116  representatives appointed by the insurers with the three highest
 1117  voluntary market share of residential property insurance
 1118  business in the state; one representative from the Office of
 1119  Insurance Regulation; one consumer appointed by the board who is
 1120  insured by the corporation at the time of appointment to the
 1121  committee; one representative appointed by the Florida
 1122  Association of Realtors; and one representative appointed by the
 1123  Florida Bankers Association. All members shall be appointed to
 1124  3-year terms and may serve for consecutive terms.
 1125         (II) The committee shall report to the corporation at each
 1126  board meeting on insurance market issues which may include rates
 1127  and rate competition with the voluntary market; service,
 1128  including policy issuance, claims processing, and general
 1129  responsiveness to policyholders, applicants, and agents; and
 1130  matters relating to depopulation.
 1131         5. Must provide a procedure for determining the eligibility
 1132  of a risk for coverage, as follows:
 1133         a. Subject to s. 627.3517, with respect to personal lines
 1134  residential risks, if the risk is offered coverage from an
 1135  authorized insurer at the insurer’s approved rate under a
 1136  standard policy including wind coverage or, if consistent with
 1137  the insurer’s underwriting rules as filed with the office, a
 1138  basic policy including wind coverage, for a new application to
 1139  the corporation for coverage, the risk is not eligible for any
 1140  policy issued by the corporation unless the premium for coverage
 1141  from the authorized insurer is more than 15 percent greater than
 1142  the premium for comparable coverage from the corporation.
 1143  Whenever an offer of coverage for a personal lines residential
 1144  risk is received for a policyholder of the corporation at
 1145  renewal from an authorized insurer, if the offer is equal to or
 1146  less than the corporation’s renewal premium for comparable
 1147  coverage, the risk is not eligible for coverage with the
 1148  corporation. If the risk is not able to obtain such offer, the
 1149  risk is eligible for a standard policy including wind coverage
 1150  or a basic policy including wind coverage issued by the
 1151  corporation; however, if the risk could not be insured under a
 1152  standard policy including wind coverage regardless of market
 1153  conditions, the risk is eligible for a basic policy including
 1154  wind coverage unless rejected under subparagraph 8. However, a
 1155  policyholder of the corporation or a policyholder removed from
 1156  the corporation through an assumption agreement remains eligible
 1157  for coverage from the corporation until the end of the
 1158  assumption period remains eligible for coverage from the
 1159  corporation regardless of any offer of coverage from an
 1160  authorized insurer or surplus lines insurer. The corporation
 1161  shall determine the type of policy to be provided on the basis
 1162  of objective standards specified in the underwriting manual and
 1163  based on generally accepted underwriting practices.
 1164         (I) If the risk accepts an offer of coverage through the
 1165  market assistance plan or through a mechanism established by the
 1166  corporation other than a plan established by s. 627.3518, before
 1167  a policy is issued to the risk by the corporation or during the
 1168  first 30 days of coverage by the corporation, and the producing
 1169  agent who submitted the application to the plan or to the
 1170  corporation is not currently appointed by the insurer, the
 1171  insurer shall:
 1172         (A) Pay to the producing agent of record of the policy for
 1173  the first year, an amount that is the greater of the insurer’s
 1174  usual and customary commission for the type of policy written or
 1175  a fee equal to the usual and customary commission of the
 1176  corporation; or
 1177         (B) Offer to allow the producing agent of record of the
 1178  policy to continue servicing the policy for at least 1 year and
 1179  offer to pay the agent the greater of the insurer’s or the
 1180  corporation’s usual and customary commission for the type of
 1181  policy written.
 1182  
 1183  If the producing agent is unwilling or unable to accept
 1184  appointment, the new insurer shall pay the agent in accordance
 1185  with sub-sub-sub-subparagraph (A).
 1186         (II) If the corporation enters into a contractual agreement
 1187  for a take-out plan, the producing agent of record of the
 1188  corporation policy is entitled to retain any unearned commission
 1189  on the policy, and the insurer shall:
 1190         (A) Pay to the producing agent of record, for the first
 1191  year, an amount that is the greater of the insurer’s usual and
 1192  customary commission for the type of policy written or a fee
 1193  equal to the usual and customary commission of the corporation;
 1194  or
 1195         (B) Offer to allow the producing agent of record to
 1196  continue servicing the policy for at least 1 year and offer to
 1197  pay the agent the greater of the insurer’s or the corporation’s
 1198  usual and customary commission for the type of policy written.
 1199  
 1200  If the producing agent is unwilling or unable to accept
 1201  appointment, the new insurer shall pay the agent in accordance
 1202  with sub-sub-sub-subparagraph (A).
 1203         b. With respect to commercial lines residential risks, for
 1204  a new application to the corporation for coverage, if the risk
 1205  is offered coverage under a policy including wind coverage from
 1206  an authorized insurer at its approved rate, the risk is not
 1207  eligible for a policy issued by the corporation unless the
 1208  premium for coverage from the authorized insurer is more than 15
 1209  percent greater than the premium for comparable coverage from
 1210  the corporation. Whenever an offer of coverage for a commercial
 1211  lines residential risk is received for a policyholder of the
 1212  corporation at renewal from an authorized insurer, if the offer
 1213  is equal to or less than the corporation’s renewal premium for
 1214  comparable coverage, the risk is not eligible for coverage with
 1215  the corporation. If the risk is not able to obtain any such
 1216  offer, the risk is eligible for a policy including wind coverage
 1217  issued by the corporation. However, a policyholder of the
 1218  corporation or a policyholder removed from the corporation
 1219  through an assumption agreement remains eligible for coverage
 1220  from the corporation until the end of the assumption period
 1221  remains eligible for coverage from the corporation regardless of
 1222  an offer of coverage from an authorized insurer or surplus lines
 1223  insurer.
 1224         (I) If the risk accepts an offer of coverage through the
 1225  market assistance plan or through a mechanism established by the
 1226  corporation other than a plan established by s. 627.3518, before
 1227  a policy is issued to the risk by the corporation or during the
 1228  first 30 days of coverage by the corporation, and the producing
 1229  agent who submitted the application to the plan or the
 1230  corporation is not currently appointed by the insurer, the
 1231  insurer shall:
 1232         (A) Pay to the producing agent of record of the policy, for
 1233  the first year, an amount that is the greater of the insurer’s
 1234  usual and customary commission for the type of policy written or
 1235  a fee equal to the usual and customary commission of the
 1236  corporation; or
 1237         (B) Offer to allow the producing agent of record of the
 1238  policy to continue servicing the policy for at least 1 year and
 1239  offer to pay the agent the greater of the insurer’s or the
 1240  corporation’s usual and customary commission for the type of
 1241  policy written.
 1242  
 1243  If the producing agent is unwilling or unable to accept
 1244  appointment, the new insurer shall pay the agent in accordance
 1245  with sub-sub-sub-subparagraph (A).
 1246         (II) If the corporation enters into a contractual agreement
 1247  for a take-out plan, the producing agent of record of the
 1248  corporation policy is entitled to retain any unearned commission
 1249  on the policy, and the insurer shall:
 1250         (A) Pay to the producing agent of record, for the first
 1251  year, an amount that is the greater of the insurer’s usual and
 1252  customary commission for the type of policy written or a fee
 1253  equal to the usual and customary commission of the corporation;
 1254  or
 1255         (B) Offer to allow the producing agent of record to
 1256  continue servicing the policy for at least 1 year and offer to
 1257  pay the agent the greater of the insurer’s or the corporation’s
 1258  usual and customary commission for the type of policy written.
 1259  
 1260  If the producing agent is unwilling or unable to accept
 1261  appointment, the new insurer shall pay the agent in accordance
 1262  with sub-sub-sub-subparagraph (A).
 1263         c. For purposes of determining comparable coverage under
 1264  sub-subparagraphs a. and b., the comparison must be based on
 1265  those forms and coverages that are reasonably comparable. The
 1266  corporation may rely on a determination of comparable coverage
 1267  and premium made by the producing agent who submits the
 1268  application to the corporation, made in the agent’s capacity as
 1269  the corporation’s agent. A comparison may be made solely of the
 1270  premium with respect to the main building or structure only on
 1271  the following basis: the same coverage A or other building
 1272  limits; the same percentage hurricane deductible that applies on
 1273  an annual basis or that applies to each hurricane for commercial
 1274  residential property; the same percentage of ordinance and law
 1275  coverage, if the same limit is offered by both the corporation
 1276  and the authorized insurer; the same mitigation credits, to the
 1277  extent the same types of credits are offered both by the
 1278  corporation and the authorized insurer; the same method for loss
 1279  payment, such as replacement cost or actual cash value, if the
 1280  same method is offered both by the corporation and the
 1281  authorized insurer in accordance with underwriting rules; and
 1282  any other form or coverage that is reasonably comparable as
 1283  determined by the board. If an application is submitted to the
 1284  corporation for wind-only coverage in the coastal account, the
 1285  premium for the corporation’s wind-only policy plus the premium
 1286  for the ex-wind policy that is offered by an authorized insurer
 1287  to the applicant must be compared to the premium for multiperil
 1288  coverage offered by an authorized insurer, subject to the
 1289  standards for comparison specified in this subparagraph. If the
 1290  corporation or the applicant requests from the authorized
 1291  insurer a breakdown of the premium of the offer by types of
 1292  coverage so that a comparison may be made by the corporation or
 1293  its agent and the authorized insurer refuses or is unable to
 1294  provide such information, the corporation may treat the offer as
 1295  not being an offer of coverage from an authorized insurer at the
 1296  insurer’s approved rate.
 1297         6. Must include rules for classifications of risks and
 1298  rates.
 1299         7. Must provide that if premium and investment income for
 1300  an account attributable to a particular calendar year are in
 1301  excess of projected losses and expenses for the account
 1302  attributable to that year, such excess shall be held in surplus
 1303  in the account. Such surplus must be available to defray
 1304  deficits in that account as to future years and used for that
 1305  purpose before assessing assessable insurers and assessable
 1306  insureds as to any calendar year.
 1307         8. Must provide objective criteria and procedures to be
 1308  uniformly applied to all applicants in determining whether an
 1309  individual risk is so hazardous as to be uninsurable. In making
 1310  this determination and in establishing the criteria and
 1311  procedures, the following must be considered:
 1312         a. Whether the likelihood of a loss for the individual risk
 1313  is substantially higher than for other risks of the same class;
 1314  and
 1315         b. Whether the uncertainty associated with the individual
 1316  risk is such that an appropriate premium cannot be determined.
 1317  
 1318  The acceptance or rejection of a risk by the corporation shall
 1319  be construed as the private placement of insurance, and the
 1320  provisions of chapter 120 do not apply.
 1321         9. Must provide that the corporation make its best efforts
 1322  to procure catastrophe reinsurance at reasonable rates, to cover
 1323  its projected 100-year probable maximum loss as determined by
 1324  the board of governors.
 1325         10. The policies issued by the corporation must provide
 1326  that if the corporation or the market assistance plan obtains an
 1327  offer from an authorized insurer to cover the risk at its
 1328  approved rates, the risk is no longer eligible for renewal
 1329  through the corporation, except as otherwise provided in this
 1330  subsection.
 1331         11. Corporation policies and applications must include a
 1332  notice that the corporation policy could, under this section, be
 1333  replaced with a policy issued by an authorized insurer which
 1334  does not provide coverage identical to the coverage provided by
 1335  the corporation. The notice must also specify that acceptance of
 1336  corporation coverage creates a conclusive presumption that the
 1337  applicant or policyholder is aware of this potential.
 1338         12. May establish, subject to approval by the office,
 1339  different eligibility requirements and operational procedures
 1340  for any line or type of coverage for any specified county or
 1341  area if the board determines that such changes are justified due
 1342  to the voluntary market being sufficiently stable and
 1343  competitive in such area or for such line or type of coverage
 1344  and that consumers who, in good faith, are unable to obtain
 1345  insurance through the voluntary market through ordinary methods
 1346  continue to have access to coverage from the corporation. If
 1347  coverage is sought in connection with a real property transfer,
 1348  the requirements and procedures may not provide an effective
 1349  date of coverage later than the date of the closing of the
 1350  transfer as established by the transferor, the transferee, and,
 1351  if applicable, the lender.
 1352         13. Must provide that, with respect to the coastal account,
 1353  any assessable insurer with a surplus as to policyholders of $25
 1354  million or less writing 25 percent or more of its total
 1355  countrywide property insurance premiums in this state may
 1356  petition the office, within the first 90 days of each calendar
 1357  year, to qualify as a limited apportionment company. A regular
 1358  assessment levied by the corporation on a limited apportionment
 1359  company for a deficit incurred by the corporation for the
 1360  coastal account may be paid to the corporation on a monthly
 1361  basis as the assessments are collected by the limited
 1362  apportionment company from its insureds, but a limited
 1363  apportionment company must begin collecting the regular
 1364  assessments not later than 90 days after the regular assessments
 1365  are levied by the corporation, and the regular assessments must
 1366  be paid in full within 15 months after being levied by the
 1367  corporation. A limited apportionment company shall collect from
 1368  its policyholders any emergency assessment imposed under sub
 1369  subparagraph (b)3.d. The plan must provide that, if the office
 1370  determines that any regular assessment will result in an
 1371  impairment of the surplus of a limited apportionment company,
 1372  the office may direct that all or part of such assessment be
 1373  deferred as provided in subparagraph (q)4. However, an emergency
 1374  assessment to be collected from policyholders under sub
 1375  subparagraph (b)3.d. may not be limited or deferred.
 1376         14. Must provide that the corporation appoint as its
 1377  licensed agents only those agents who also hold an appointment
 1378  as defined in s. 626.015(3) with an insurer who at the time of
 1379  the agent’s initial appointment by the corporation is authorized
 1380  to write and is actually writing personal lines residential
 1381  property coverage, commercial residential property coverage, or
 1382  commercial nonresidential property coverage within the state.
 1383         15. Must provide a premium payment plan option to its
 1384  policyholders which, at a minimum, allows for quarterly and
 1385  semiannual payment of premiums. A monthly payment plan may, but
 1386  is not required to, be offered.
 1387         16. Must limit coverage on mobile homes or manufactured
 1388  homes built before 1994 to actual cash value of the dwelling
 1389  rather than replacement costs of the dwelling.
 1390         17. May provide such limits of coverage as the board
 1391  determines, consistent with the requirements of this subsection.
 1392         18. May require commercial property to meet specified
 1393  hurricane mitigation construction features as a condition of
 1394  eligibility for coverage.
 1395         19. Must provide that new or renewal policies issued by the
 1396  corporation on or after January 1, 2012, which cover sinkhole
 1397  loss do not include coverage for any loss to appurtenant
 1398  structures, driveways, sidewalks, decks, or patios that are
 1399  directly or indirectly caused by sinkhole activity. The
 1400  corporation shall exclude such coverage using a notice of
 1401  coverage change, which may be included with the policy renewal,
 1402  and not by issuance of a notice of nonrenewal of the excluded
 1403  coverage upon renewal of the current policy.
 1404         20. As of January 1, 2012, must require that the agent
 1405  obtain from an applicant for coverage from the corporation an
 1406  acknowledgment signed by the applicant, which includes, at a
 1407  minimum, the following statement:
 1408                ACKNOWLEDGMENT OF POTENTIAL SURCHARGE              
 1409                      AND ASSESSMENT LIABILITY:                    
 1410         1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
 1411  CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
 1412  DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
 1413  MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
 1414  PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
 1415  POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
 1416  OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
 1417  LEGISLATURE.
 1418         2.I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
 1419  SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM,
 1420  BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
 1421  BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN
 1422  PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
 1423  WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
 1424  ARE REGULATED AND APPROVED BY THE STATE.
 1425         3.2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
 1426  ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
 1427  INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
 1428  FLORIDA LEGISLATURE.
 1429         4.3. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
 1430  CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
 1431  STATE OF FLORIDA.
 1432         a. The corporation shall maintain, in electronic format or
 1433  otherwise, a copy of the applicant’s signed acknowledgment and
 1434  provide a copy of the statement to the policyholder as part of
 1435  the first renewal after the effective date of this subparagraph.
 1436         b. The signed acknowledgment form creates a conclusive
 1437  presumption that the policyholder understood and accepted his or
 1438  her potential surcharge and assessment liability as a
 1439  policyholder of the corporation.
 1440         (i)1. The Office of the Internal Auditor is established
 1441  within the corporation to provide a central point for
 1442  coordination of and responsibility for activities that promote
 1443  accountability, integrity, and efficiency to the policyholders
 1444  and to the taxpayers of this state. The internal auditor shall
 1445  be appointed by the board of governors, shall report to and be
 1446  under the general supervision of the board of governors, and is
 1447  not subject to supervision by an any employee of the
 1448  corporation. Administrative staff and support shall be provided
 1449  by the corporation. The internal auditor shall be appointed
 1450  without regard to political affiliation. It is the duty and
 1451  responsibility of the internal auditor to:
 1452         a. Provide direction for, supervise, conduct, and
 1453  coordinate audits, investigations, and management reviews
 1454  relating to the programs and operations of the corporation.
 1455         b. Conduct, supervise, or coordinate other activities
 1456  carried out or financed by the corporation for the purpose of
 1457  promoting efficiency in the administration of, or preventing and
 1458  detecting fraud, abuse, and mismanagement in, its programs and
 1459  operations.
 1460         c. Submit final audit reports, reviews, or investigative
 1461  reports to the board of governors, the executive director, the
 1462  members of the Financial Services Commission, and the President
 1463  of the Senate and the Speaker of the House of Representatives.
 1464         d. Keep the board of governors informed concerning fraud,
 1465  abuses, and internal control deficiencies relating to programs
 1466  and operations administered or financed by the corporation,
 1467  recommend corrective action, and report on the progress made in
 1468  implementing corrective action.
 1469         e. Cooperate and coordinate activities with the
 1470  corporation’s inspector general Report expeditiously to the
 1471  Department of Law Enforcement or other law enforcement agencies,
 1472  as appropriate, whenever the internal auditor has reasonable
 1473  grounds to believe there has been a violation of criminal law.
 1474         2. On or before February 15, the internal auditor shall
 1475  prepare an annual report evaluating the effectiveness of the
 1476  internal controls of the corporation and providing
 1477  recommendations for corrective action, if necessary, and
 1478  summarizing the audits, reviews, and investigations conducted by
 1479  the office during the preceding fiscal year. The final report
 1480  shall be furnished to the board of governors and the executive
 1481  director, the President of the Senate, the Speaker of the House
 1482  of Representatives, and the Financial Services Commission.
 1483         (k)1. The corporation shall establish and maintain a unit
 1484  or division to investigate possible fraudulent claims by
 1485  insureds or by persons making claims for services or repairs
 1486  against policies held by insureds; or it may contract with
 1487  others to investigate possible fraudulent claims for services or
 1488  repairs against policies held by the corporation pursuant to s.
 1489  626.9891. The corporation must comply with reporting
 1490  requirements of s. 626.9891. An employee of the corporation
 1491  shall notify the corporation’s Office of the Inspector General
 1492  Internal Auditor and the Division of Insurance Fraud within 48
 1493  hours after having information that would lead a reasonable
 1494  person to suspect that fraud may have been committed by any
 1495  employee of the corporation.
 1496         2. The corporation shall establish a unit or division
 1497  responsible for receiving and responding to consumer complaints,
 1498  which unit or division is the sole responsibility of a senior
 1499  manager of the corporation.
 1500         (q)1. The corporation shall certify to the office its needs
 1501  for annual assessments as to a particular calendar year, and for
 1502  any interim assessments that it deems to be necessary to sustain
 1503  operations as to a particular year pending the receipt of annual
 1504  assessments. Upon verification, the office shall approve such
 1505  certification, and the corporation shall levy such annual or
 1506  interim assessments. Such assessments shall be prorated as
 1507  provided in paragraph (b). The corporation shall take all
 1508  reasonable and prudent steps necessary to collect the amount of
 1509  assessments due from each assessable insurer, including, if
 1510  prudent, filing suit to collect the assessments, and the office
 1511  may provide such assistance to the corporation it deems
 1512  appropriate. If the corporation is unable to collect an
 1513  assessment from any assessable insurer, the uncollected
 1514  assessments shall be levied as an additional assessment against
 1515  the assessable insurers and any assessable insurer required to
 1516  pay an additional assessment as a result of such failure to pay
 1517  shall have a cause of action against such nonpaying assessable
 1518  insurer. Assessments shall be included as an appropriate factor
 1519  in the making of rates. The failure of a surplus lines agent to
 1520  collect and remit any regular or emergency assessment levied by
 1521  the corporation is considered to be a violation of s. 626.936
 1522  and subjects the surplus lines agent to the penalties provided
 1523  in that section.
 1524         2. The governing body of any unit of local government, any
 1525  residents of which are insured by the corporation, may issue
 1526  bonds as defined in s. 125.013 or s. 166.101 from time to time
 1527  to fund an assistance program, in conjunction with the
 1528  corporation, for the purpose of defraying deficits of the
 1529  corporation. In order to avoid needless and indiscriminate
 1530  proliferation, duplication, and fragmentation of such assistance
 1531  programs, any unit of local government, any residents of which
 1532  are insured by the corporation, may provide for the payment of
 1533  losses, regardless of whether or not the losses occurred within
 1534  or outside of the territorial jurisdiction of the local
 1535  government. Revenue bonds under this subparagraph may not be
 1536  issued until validated pursuant to chapter 75, unless a state of
 1537  emergency is declared by executive order or proclamation of the
 1538  Governor pursuant to s. 252.36 making such findings as are
 1539  necessary to determine that it is in the best interests of, and
 1540  necessary for, the protection of the public health, safety, and
 1541  general welfare of residents of this state and declaring it an
 1542  essential public purpose to permit certain municipalities or
 1543  counties to issue such bonds as will permit relief to claimants
 1544  and policyholders of the corporation. Any such unit of local
 1545  government may enter into such contracts with the corporation
 1546  and with any other entity created pursuant to this subsection as
 1547  are necessary to carry out this paragraph. Any bonds issued
 1548  under this subparagraph shall be payable from and secured by
 1549  moneys received by the corporation from emergency assessments
 1550  under sub-subparagraph (b)3.d., and assigned and pledged to or
 1551  on behalf of the unit of local government for the benefit of the
 1552  holders of such bonds. The funds, credit, property, and taxing
 1553  power of the state or of the unit of local government shall not
 1554  be pledged for the payment of such bonds.
 1555         3.a. The corporation shall adopt one or more programs
 1556  subject to approval by the office for the reduction of both new
 1557  and renewal writings in the corporation. Beginning January 1,
 1558  2008, any program the corporation adopts for the payment of
 1559  bonuses to an insurer for each risk the insurer removes from the
 1560  corporation shall comply with s. 627.3511(2) and may not exceed
 1561  the amount referenced in s. 627.3511(2) for each risk removed.
 1562  The corporation may consider any prudent and not unfairly
 1563  discriminatory approach to reducing corporation writings, and
 1564  may adopt a credit against assessment liability or other
 1565  liability that provides an incentive for insurers to take risks
 1566  out of the corporation and to keep risks out of the corporation
 1567  by maintaining or increasing voluntary writings in counties or
 1568  areas in which corporation risks are highly concentrated and a
 1569  program to provide a formula under which an insurer voluntarily
 1570  taking risks out of the corporation by maintaining or increasing
 1571  voluntary writings will be relieved wholly or partially from
 1572  assessments under sub-subparagraph (b)3.a. However, any “take
 1573  out bonus” or payment to an insurer must be conditioned on the
 1574  property being insured for at least 5 years by the insurer,
 1575  unless canceled or nonrenewed by the policyholder. If the policy
 1576  is canceled or nonrenewed by the policyholder before the end of
 1577  the 5-year period, the amount of the take-out bonus must be
 1578  prorated for the time period the policy was insured. When the
 1579  corporation enters into a contractual agreement for a take-out
 1580  plan, the producing agent of record of the corporation policy is
 1581  entitled to retain any unearned commission on such policy, and
 1582  the insurer shall either:
 1583         (I) Pay to the producing agent of record of the policy, for
 1584  the first year, an amount which is the greater of the insurer’s
 1585  usual and customary commission for the type of policy written or
 1586  a policy fee equal to the usual and customary commission of the
 1587  corporation; or
 1588         (II) Offer to allow the producing agent of record of the
 1589  policy to continue servicing the policy for a period of not less
 1590  than 1 year and offer to pay the agent the insurer’s usual and
 1591  customary commission for the type of policy written. If the
 1592  producing agent is unwilling or unable to accept appointment by
 1593  the new insurer, the new insurer shall pay the agent in
 1594  accordance with sub-sub-subparagraph (I).
 1595         b. Any credit or exemption from regular assessments adopted
 1596  under this subparagraph shall last no longer than the 3 years
 1597  following the cancellation or expiration of the policy by the
 1598  corporation. With the approval of the office, the board may
 1599  extend such credits for an additional year if the insurer
 1600  guarantees an additional year of renewability for all policies
 1601  removed from the corporation, or for 2 additional years if the
 1602  insurer guarantees 2 additional years of renewability for all
 1603  policies so removed.
 1604         c. There shall be no credit, limitation, exemption, or
 1605  deferment from emergency assessments to be collected from
 1606  policyholders pursuant to sub-subparagraph (b)3.d.
 1607         4. The plan shall provide for the deferment, in whole or in
 1608  part, of the assessment of an assessable insurer, other than an
 1609  emergency assessment collected from policyholders pursuant to
 1610  sub-subparagraph (b)3.d., if the office finds that payment of
 1611  the assessment would endanger or impair the solvency of the
 1612  insurer. In the event an assessment against an assessable
 1613  insurer is deferred in whole or in part, the amount by which
 1614  such assessment is deferred may be assessed against the other
 1615  assessable insurers in a manner consistent with the basis for
 1616  assessments set forth in paragraph (b).
 1617         5. Effective July 1, 2007, in order to evaluate the costs
 1618  and benefits of approved take-out plans, if the corporation pays
 1619  a bonus or other payment to an insurer for an approved take-out
 1620  plan, it shall maintain a record of the address or such other
 1621  identifying information on the property or risk removed in order
 1622  to track if and when the property or risk is later insured by
 1623  the corporation.
 1624         6. Any policy taken out, assumed, or removed from the
 1625  corporation is, as of the effective date of the take-out,
 1626  assumption, or removal, direct insurance issued by the insurer
 1627  and not by the corporation, even if the corporation continues to
 1628  service the policies. This subparagraph applies to policies of
 1629  the corporation and not policies taken out, assumed, or removed
 1630  from any other entity.
 1631         7.For a policy taken out, assumed, or removed from the
 1632  corporation, the insurer may, for a period of no more than 3
 1633  years, continue to use any of the corporation’s policy forms or
 1634  endorsements that apply to the policy taken out, removed, or
 1635  assumed without obtaining approval from the office for use of
 1636  such policy form or endorsement.
 1637         (gg)The Office of Inspector General is established within
 1638  the corporation to provide a central point for coordination of
 1639  and responsibility for activities that promote accountability,
 1640  integrity, and efficiency. The office shall be headed by an
 1641  inspector general, which is a senior management position that
 1642  involves planning, coordinating, and performing activities
 1643  assigned to and assumed by the inspector general for the
 1644  corporation.
 1645         1.The inspector general shall be appointed by the
 1646  Financial Services Commission and may only be removed from
 1647  office by the commission. The inspector general shall be
 1648  appointed without regard to political affiliation.
 1649         a.At a minimum, the inspector general must possess a
 1650  bachelor’s degree from an accredited college or university and 8
 1651  years of professional experience related to the duties of an
 1652  inspector general as described in this paragraph, of which 5
 1653  years must have been at a supervisory level.
 1654         b.The inspector general shall report to, and be under the
 1655  supervision of, the chair of the board of governors. The
 1656  executive director or corporation staff may not prevent or
 1657  prohibit the inspector general from initiating, carrying out, or
 1658  completing any audit, review, evaluation, study, or
 1659  investigation.
 1660         2.The inspector general shall initiate, direct,
 1661  coordinate, participate in, and perform audits, reviews,
 1662  evaluations, studies, and investigations designed to assess
 1663  management practices; compliance with laws, rules, and policies;
 1664  and program effectiveness and efficiency. This includes:
 1665         a.Conducting internal examinations; investigating
 1666  allegations of fraud, waste, abuse, malfeasance, mismanagement,
 1667  employee misconduct, or violations of corporation policies; and
 1668  conducting any other investigations as directed by the Financial
 1669  Services Commission or as independently determined.
 1670         b.Evaluating and recommending actions regarding security,
 1671  the ethical behavior of personnel and vendors, and compliance
 1672  with rules, laws, policies, and personnel matters; and rendering
 1673  ethics opinions.
 1674         c.Evaluating personnel and administrative policy
 1675  compliance, management and operational matters, and human
 1676  resources-related matters.
 1677         d.Evaluating the application of a corporation code of
 1678  ethics, providing reviews and recommendations on the design and
 1679  content of ethics-related policy training courses, educating
 1680  employees on the code and on appropriate conduct, and checking
 1681  for compliance.
 1682         e.Evaluating the activities of the senior management team
 1683  and management’s compliance with recommended solutions.
 1684         f.Cooperating and coordinating activities with the chief
 1685  of internal audit.
 1686         g.Maintaining records of investigations and discipline in
 1687  accordance with established policies, or as otherwise required.
 1688         h.Supervising and directing the tasks and assignments of
 1689  the staff assigned to assist with the inspector general’s
 1690  projects, including regular review and feedback regarding work
 1691  in progress and providing recommendations regarding relevant
 1692  training and staff development activities.
 1693         i.Directing, planning, preparing, and presenting interim
 1694  and final reports and oral briefings which communicate the
 1695  results of studies, reviews, and investigations.
 1696         j.Providing the executive director with independent and
 1697  objective assessments of programs and activities.
 1698         k.Completing special projects, assignments, and other
 1699  duties as requested by the Financial Services Commission.
 1700         l.Reporting expeditiously to the Department of Law
 1701  Enforcement or other law enforcement agencies, as appropriate,
 1702  whenever the inspector general has reasonable grounds to believe
 1703  there has been a violation of criminal law.
 1704         (hh)The corporation must prepare a report for each
 1705  calendar year outlining both the statewide average and county
 1706  specific details of the loss ratio attributable to losses that
 1707  are not catastrophic losses for residential coverage provided by
 1708  the corporation, which information must be presented to the
 1709  office and available for public inspection on the Internet
 1710  website of the corporation by January 15th of the following
 1711  calendar year.
 1712         Section 8. Effective October 1, 2013, paragraphs (e) and
 1713  (t) of subsection (6) of section 627.351, Florida Statutes, are
 1714  amended to read:
 1715         627.351 Insurance risk apportionment plans.—
 1716         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
 1717         (e) The corporation is subject to s. 287.057 for the
 1718  purchase of commodities and contractual services except as
 1719  otherwise provided in this paragraph. Services provided by
 1720  tradepersons or technical experts to assist a licensed adjuster
 1721  in the evaluation of individual claims are not subject to the
 1722  procurement requirements of this section. Additionally, the
 1723  procurement of financial services providers and underwriters
 1724  must be made pursuant to s. 627.3513 Purchases that equal or
 1725  exceed $2,500, but are less than $25,000, shall be made by
 1726  receipt of written quotes, written record of telephone quotes,
 1727  or informal bids, whenever practical. The procurement of goods
 1728  or services valued at or over $25,000 shall be subject to
 1729  competitive solicitation, except in situations where the goods
 1730  or services are provided by a sole source or are deemed an
 1731  emergency purchase; the services are exempted from competitive
 1732  solicitation requirements under s. 287.057(3)(f); or the
 1733  procurement of services is subject to s. 627.3513. Justification
 1734  for the sole-sourcing or emergency procurement must be
 1735  documented. Contracts for goods or services valued at or more
 1736  than over $100,000 are subject to approval by the board.
 1737         1.The corporation is an agency for purposes of s. 287.057,
 1738  except that, for purposes of s. 287.057(22), the corporation is
 1739  an eligible user.
 1740         a.The authority of the Department of Management Services
 1741  and the Chief Financial Officer under s. 287.057 extends to the
 1742  corporation as if the corporation were an agency.
 1743         b.The executive director of the corporation is the agency
 1744  head under s. 287.057, except for resolution of bid protests for
 1745  which the board would serve as the agency head.
 1746         2.The corporation must provide notice of a decision or
 1747  intended decision concerning a solicitation, contract award, or
 1748  exceptional purchase by electronic posting. Such notice must
 1749  contain the following statement: “Failure to file a protest
 1750  within the time prescribed in this section constitutes a waiver
 1751  of proceedings.”
 1752         a.A person adversely affected by the corporation’s
 1753  decision or intended decision to award a contract pursuant to s.
 1754  287.057(1) or s. 287.057(3)(c) who elects to challenge the
 1755  decision must file a written notice of protest with the
 1756  executive director of the corporation within 72 hours after the
 1757  corporation posts a notice of its decision or intended decision.
 1758  For a protest of the terms, conditions, and specifications
 1759  contained in a solicitation, including any provisions governing
 1760  the methods for ranking bids, proposals, replies, awarding
 1761  contracts, reserving rights of further negotiation, or modifying
 1762  or amending any contract, the notice of protest must be filed in
 1763  writing within 72 hours after the posting of the solicitation.
 1764  Saturdays, Sundays, and state holidays are excluded in the
 1765  computation of the 72-hour time period.
 1766         b.A formal written protest must be filed within 10 days
 1767  after the date the notice of protest is filed. The formal
 1768  written protest must state with particularity the facts and law
 1769  upon which the protest is based. Upon receipt of a formal
 1770  written protest that has been timely filed, the corporation must
 1771  stop the solicitation or contract award process until the
 1772  subject of the protest is resolved by final board action unless
 1773  the executive director sets forth in writing particular facts
 1774  and circumstances that require the continuance of the
 1775  solicitation or contract award process without delay in order to
 1776  avoid an immediate and serious danger to the public health,
 1777  safety, or welfare. The corporation must provide an opportunity
 1778  to resolve the protest by mutual agreement between the parties
 1779  within 7 business days after receipt of the formal written
 1780  protest. If the subject of a protest is not resolved by mutual
 1781  agreement within 7 business days, the corporation’s board must
 1782  place the protest on the agenda and resolve it at its next
 1783  regularly scheduled meeting. The protest must be heard by the
 1784  board at a publicly noticed meeting in accordance with
 1785  procedures established by the board.
 1786         c.In a protest of an invitation-to-bid or request-for
 1787  proposals procurement, submissions made after the bid or
 1788  proposal opening which amend or supplement the bid or proposal
 1789  may not be considered. In protesting an invitation-to-negotiate
 1790  procurement, submissions made after the corporation announces
 1791  its intent to award a contract, reject all replies, or withdraw
 1792  the solicitation that amends or supplements the reply may not be
 1793  considered. Unless otherwise provided by law, the burden of
 1794  proof rests with the party protesting the corporation’s action.
 1795  In a competitive-procurement protest, other than a rejection of
 1796  all bids, proposals, or replies, the corporation’s board must
 1797  conduct a de novo proceeding to determine whether the
 1798  corporation’s proposed action is contrary to the corporation’s
 1799  governing statutes, the corporation’s rules or policies, or the
 1800  solicitation specifications. The standard of proof for the
 1801  proceeding is whether the corporation’s action was clearly
 1802  erroneous, contrary to competition, arbitrary, or capricious. In
 1803  any bid-protest proceeding contesting an intended corporation
 1804  action to reject all bids, proposals, or replies, the standard
 1805  of review by the board is whether the corporation’s intended
 1806  action is illegal, arbitrary, dishonest, or fraudulent.
 1807         d.Failure to file a notice of protest or failure to file a
 1808  formal written protest constitutes a waiver of proceedings.
 1809         3.Contract actions and decisions by the board under this
 1810  paragraph are final. Any further legal remedy must be made in
 1811  the Circuit Court of Leon County.
 1812         (t) For the purposes of s. 199.183(1), the corporation
 1813  shall be considered a political subdivision of the state and
 1814  shall be exempt from the corporate income tax. The premiums,
 1815  assessments, investment income, and other revenue of the
 1816  corporation are funds received for providing property insurance
 1817  coverage as required by this subsection, paying claims for
 1818  Florida citizens insured by the corporation, securing and
 1819  repaying debt obligations issued by the corporation, and
 1820  conducting all other activities of the corporation, and shall
 1821  not be considered taxes, fees, licenses, or charges for services
 1822  imposed by the Legislature on individuals, businesses, or
 1823  agencies outside state government. Bonds and other debt
 1824  obligations issued by or on behalf of the corporation are not to
 1825  be considered “state bonds” within the meaning of s. 215.58(8).
 1826  The corporation is not subject to the procurement provisions of
 1827  chapter 287 as provided in paragraph (e), and policies and
 1828  decisions of the corporation relating to incurring debt, levying
 1829  of assessments and the sale, issuance, continuation, terms and
 1830  claims under corporation policies, and all services relating
 1831  thereto, are not subject to the provisions of chapter 120. The
 1832  corporation is not required to obtain or to hold a certificate
 1833  of authority issued by the office, nor is it required to
 1834  participate as a member insurer of the Florida Insurance
 1835  Guaranty Association. However, the corporation is required to
 1836  pay, in the same manner as an authorized insurer, assessments
 1837  levied by the Florida Insurance Guaranty Association. It is the
 1838  intent of the Legislature that the tax exemptions provided in
 1839  this paragraph will augment the financial resources of the
 1840  corporation to better enable the corporation to fulfill its
 1841  public purposes. Any debt obligations issued by the corporation,
 1842  their transfer, and the income therefrom, including any profit
 1843  made on the sale thereof, shall at all times be free from
 1844  taxation of every kind by the state and any political
 1845  subdivision or local unit or other instrumentality thereof;
 1846  however, this exemption does not apply to any tax imposed by
 1847  chapter 220 on interest, income, or profits on debt obligations
 1848  owned by corporations other than the corporation.
 1849         Section 9. The purchase of commodities and contractual
 1850  services by Citizens Property Insurance Corporation commenced
 1851  before October 1, 2013, is governed by the law in effect on
 1852  September 30, 2013.
 1853         Section 10. Section 627.3518, Florida Statutes, is created
 1854  to read:
 1855         627.3518Citizens Property Insurance Corporation
 1856  policyholder eligibility clearinghouse program.—The purpose of
 1857  this section is to provide a framework for the corporation to
 1858  implement a clearinghouse program by January 1, 2014.
 1859         (1)As used in this section, the term:
 1860         (a)“Corporation” means Citizens Property Insurance
 1861  Corporation.
 1862         (b)“Exclusive agent” means any licensed insurance agent
 1863  that has, by contract, agreed to act exclusively for one company
 1864  or group of affiliated insurance companies and is disallowed by
 1865  the provisions of that contract to directly write for any other
 1866  unaffiliated insurer absent express consent from the company or
 1867  group of affiliated insurance companies.
 1868         (c)“Independent agent” means any licensed insurance agent
 1869  not described in paragraph (b).
 1870         (d)“Program” means the clearinghouse created under this
 1871  section.
 1872         (2)In order to confirm eligibility with the corporation
 1873  and to enhance access of new applicants for coverage and
 1874  existing policyholders of the corporation to offers of coverage
 1875  from authorized insurers, the corporation shall establish a
 1876  program for personal residential risks in order to facilitate
 1877  the diversion of ineligible applicants and existing
 1878  policyholders from the corporation into the voluntary insurance
 1879  market. The corporation shall also develop appropriate
 1880  procedures for facilitating the diversion of ineligible
 1881  applicants and existing policyholders for commercial residential
 1882  coverage into the private insurance market and shall report such
 1883  procedures to the President of the Senate and the Speaker of the
 1884  House of Representatives by January 1, 2014.
 1885         (3)The corporation board shall establish the clearinghouse
 1886  program as an organizational unit within the corporation. The
 1887  program shall have all the rights and responsibilities in
 1888  carrying out its duties as a licensed general lines agent, but
 1889  may not be required to employ or engage a licensed general lines
 1890  agent or to maintain an insurance agency license to carry out
 1891  its activities in the solicitation and placement of insurance
 1892  coverage. In establishing the program, the corporation may:
 1893         (a)Require all new applications, and all policies due for
 1894  renewal, to be submitted for coverage to the program in order to
 1895  facilitate obtaining an offer of coverage from an authorized
 1896  insurer before binding or renewing coverage by the corporation.
 1897         (b)Employ or otherwise contract with individuals or other
 1898  entities for appropriate administrative or professional services
 1899  to effectuate the plan within the corporation in accordance with
 1900  the applicable purchasing requirements under s. 627.351.
 1901         (c)Enter into contracts with any authorized insurer to
 1902  participate in the program and accept an appointment by such
 1903  insurer.
 1904         (d)Provide funds to operate the program. Insurers and
 1905  agents participating in the program are not required to pay a
 1906  fee to offset or partially offset the cost of the program or use
 1907  the program for renewal of policies initially written through
 1908  the clearinghouse.
 1909         (e)Develop an enhanced application that includes
 1910  information to assist private insurers in determining whether to
 1911  make an offer of coverage through the program.
 1912         (f)For personal lines residential risks, require, before
 1913  approving all new applications for coverage by the corporation,
 1914  that every application be subject to a period of 2 business days
 1915  when any insurer participating in the program may select the
 1916  application for coverage. The insurer may issue a binder on any
 1917  policy selected for coverage for a period of at least 30 days
 1918  but not more than 60 days.
 1919         (4)Any authorized insurer may participate in the program;
 1920  however, participation is not mandatory for any insurer.
 1921  Insurers making offers of coverage to new applicants or renewal
 1922  policyholders through the program:
 1923         (a)May not be required to individually appoint any agent
 1924  whose customer is underwritten and bound through the program.
 1925  Notwithstanding s. 626.112, insurers are not required to appoint
 1926  any agent on a policy underwritten through the program for as
 1927  long as that policy remains with the insurer. Insurers may, at
 1928  their election, appoint any agent whose customer is initially
 1929  underwritten and bound through the program. In the event an
 1930  insurer accepts a policy from an agent who is not appointed
 1931  pursuant to this paragraph, and thereafter elects to accept a
 1932  policy from such agent, the provisions of s. 626.112 requiring
 1933  appointment apply to the agent.
 1934         (b)Must enter into a limited agency agreement with each
 1935  agent that is not appointed in accordance with paragraph (a) and
 1936  whose customer is underwritten and bound through the program.
 1937         (c)Must enter into its standard agency agreement with each
 1938  agent whose customer is underwritten and bound through the
 1939  program when that agent has been appointed by the insurer
 1940  pursuant to s. 626.112.
 1941         (d)Must comply with s. 627.4133(2).
 1942         (e)May participate through their single-designated
 1943  managing general agent or broker; however, the provisions of
 1944  paragraph (6)(a) regarding ownership, control, and use of the
 1945  expirations continue to apply.
 1946         (f)Must pay to the producing agent a commission equal to
 1947  that paid by the corporation or the usual and customary
 1948  commission paid by the insurer for that line of business,
 1949  whichever is greater.
 1950         (5)Notwithstanding s. 627.3517, any applicant for new
 1951  coverage from the corporation is not eligible for coverage from
 1952  the corporation, if provided an offer of coverage from an
 1953  authorized insurer through the program at a premium that is at
 1954  or below the eligibility threshold established in s.
 1955  627.351(6)(c)5.a. Whenever an offer of coverage for a personal
 1956  lines risk is received for a policyholder of the corporation at
 1957  renewal from an authorized insurer through the program, if the
 1958  offer is equal to or less than the corporation’s renewal premium
 1959  for comparable coverage, the risk is not eligible for coverage
 1960  with the corporation. In the event an offer of coverage for a
 1961  new applicant is received from an authorized insurer through the
 1962  program, and the premium offered exceeds the eligibility
 1963  threshold contained in s. 627.351(6)(c)5.a., the applicant or
 1964  insured may elect to accept such coverage, or may elect to
 1965  accept or continue coverage with the corporation. In the event
 1966  an offer of coverage for a personal lines risk is received from
 1967  an authorized insurer at renewal through the program, and the
 1968  premium offered is more than the corporation’s renewal premium
 1969  for comparable coverage, the insured may elect to accept such
 1970  coverage, or may elect to accept or continue coverage with the
 1971  corporation. Sub-sub-subparagraph 627.351(6)(c)5.a.(I) does not
 1972  apply to an offer of coverage from an authorized insurer
 1973  obtained through the program. An applicant for coverage from the
 1974  corporation who was previously declared ineligible for coverage
 1975  at renewal by the corporation in the previous 36 months due to
 1976  an offer of coverage pursuant to this subsection shall be
 1977  considered a renewal under this section if the corporation
 1978  determines that the authorized insurer making the offer of
 1979  coverage pursuant to this subsection continues to insure the
 1980  applicant and increased the rate on the policy in excess of the
 1981  increase allowed for the corporation under s. 627.351(6)(n)6.
 1982         (6)Independent insurance agents submitting new
 1983  applications for coverage or that are the agent of record on a
 1984  renewal policy submitted to the program:
 1985         (a)Are granted and must maintain ownership and the
 1986  exclusive use of expirations, records, or other written or
 1987  electronic information directly related to such applications or
 1988  renewals written through the corporation or through an insurer
 1989  participating in the program, notwithstanding s.
 1990  627.351(6)(c)5.a.(I)(B) and (II)(B). Such ownership is granted
 1991  for as long as the insured remains with the agency or until sold
 1992  or surrendered in writing by the agent. Contracts with the
 1993  corporation or required by the corporation must not amend,
 1994  modify, interfere with, or limit such rights of ownership. Such
 1995  expirations, records, or other written or electronic information
 1996  may be used to review an application, issue a policy, or for any
 1997  other purpose necessary for placing such business through the
 1998  program.
 1999         (b)May not be required to be appointed by any insurer
 2000  participating in the program for policies written solely through
 2001  the program, notwithstanding the provisions of s. 626.112.
 2002         (c)May accept an appointment from any insurer
 2003  participating in the program.
 2004         (d)May enter into either a standard or limited agency
 2005  agreement with the insurer, at the insurer’s option.
 2006  
 2007  Applicants ineligible for coverage in accordance with subsection
 2008  (5) remain ineligible if their independent agent is unwilling or
 2009  unable to enter into a standard or limited agency agreement with
 2010  an insurer participating in the program.
 2011         (7)Exclusive agents submitting new applications for
 2012  coverage or that are the agent of record on a renewal policy
 2013  submitted to the program:
 2014         (a)Must maintain ownership and the exclusive use of
 2015  expirations, records, or other written or electronic information
 2016  directly related to such applications or renewals written
 2017  through the corporation or through an insurer participating in
 2018  the program, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and
 2019  (II)(B). Contracts with the corporation or required by the
 2020  corporation must not amend, modify, interfere with, or limit
 2021  such rights of ownership. Such expirations, records, or other
 2022  written or electronic information may be used to review an
 2023  application, issue a policy, or for any other purpose necessary
 2024  for placing such business through the program.
 2025         (b)May not be required to be appointed by any insurer
 2026  participating in the program for policies written solely through
 2027  the program, notwithstanding the provisions of s. 626.112.
 2028         (c)Must only facilitate the placement of an offer of
 2029  coverage from an insurer whose limited servicing agreement is
 2030  approved by that exclusive agent’s exclusive insurer.
 2031         (d)May enter into a limited servicing agreement with the
 2032  insurer making an offer of coverage, and only after the
 2033  exclusive agent’s insurer has approved the limited servicing
 2034  agreement terms. The exclusive agent’s insurer must approve a
 2035  limited service agreement for the program for any insurer for
 2036  which it has approved a service agreement for other purposes.
 2037  
 2038  Applicants ineligible for coverage in accordance with subsection
 2039  (5) remain ineligible if their exclusive agent is unwilling or
 2040  unable to enter into a standard or limited agency agreement with
 2041  an insurer making an offer of coverage to that applicant.
 2042         (8)Submission of an application for coverage by the
 2043  corporation to the program does not constitute the binding of
 2044  coverage by the corporation, and failure of the program to
 2045  obtain an offer of coverage by an insurer may not be considered
 2046  acceptance of coverage of the risk by the corporation.
 2047         (9)The 45-day notice of nonrenewal requirement set forth
 2048  in s. 627.4133(2)(b)4.b. applies when a policy is nonrenewed by
 2049  the corporation because the risk has received an offer of
 2050  coverage pursuant to this section which renders the risk
 2051  ineligible for coverage by the corporation.
 2052         (10)The program may not include commercial nonresidential
 2053  policies.
 2054         Section 11. Section 627.35191, Florida Statutes, is created
 2055  to read:
 2056         627.35191Annual report of aggregate net probable maximum
 2057  losses, financing options, and potential assessments.—No later
 2058  than February 1 of each year, the Florida Hurricane Catastrophe
 2059  Fund and Citizens Property Insurance Corporation shall each
 2060  submit a report to the Legislature and the Financial Services
 2061  Commission identifying their respective aggregate net probable
 2062  maximum losses, financing options, and potential assessments.
 2063  The report issued by the fund and the corporation must include
 2064  their respective 50-year, 100-year, and 250-year probable
 2065  maximum losses; analysis of all reasonable financing strategies
 2066  for each such probable maximum loss, including the amount and
 2067  term of debt instruments; specification of the percentage
 2068  assessments that would be needed to support each of the
 2069  financing strategies; and calculations of the aggregate
 2070  assessment burden on Florida property and casualty policyholders
 2071  for each of the probable maximum losses.
 2072         Section 12. Except as otherwise expressly provided in this
 2073  act, this act shall take effect July 1, 2013.
 2074  

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