Bill Text: FL S0936 | 2015 | Regular Session | Introduced


Bill Title: Citizens Property Insurance Corporation

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2015-05-01 - Died in Banking and Insurance [S0936 Detail]

Download: Florida-2015-S0936-Introduced.html
       Florida Senate - 2015                                     SB 936
       
       
        
       By Senator Brandes
       
       
       
       
       
       22-00644A-15                                           2015936__
    1                        A bill to be entitled                      
    2         An act relating to Citizens Property Insurance
    3         Corporation; amending s. 215.555, F.S.; revising the
    4         definition of the term “covered policy”; amending s.
    5         626.752, F.S.; expanding an exemption from the
    6         requirements of that section which applies to the
    7         corporation to exempt additional specified activities
    8         of the corporation; amending s. 627.351, F.S.;
    9         revising requirements relating to quota share primary
   10         insurance agreements; requiring the corporation’s plan
   11         of operation to adopt a program that facilitates the
   12         removal of risks in which the corporation offers
   13         reinsurance to authorized insurers that are willing to
   14         assume risks from the corporation; specifying
   15         limitations on the corporation’s participation in the
   16         assumption of risk in agreements executed under the
   17         program; deleting and revising related terms;
   18         providing that entering into specified agreements is
   19         at the discretion of the insurer; providing that if
   20         the corporation is the reinsurer, all forms and
   21         endorsements must be approved by the Office of
   22         Insurance Regulation; prohibiting the corporation from
   23         sharing risk for certain damages; requiring the
   24         corporation and each insurer to report additional
   25         information to the fund and requiring the State Board
   26         of Administration to adopt rules to administer this
   27         requirement; revising the procedures for determining
   28         whether a risk is eligible for the corporation;
   29         providing an effective date.
   30          
   31  Be It Enacted by the Legislature of the State of Florida:
   32  
   33         Section 1. Paragraph (c) of subsection (2) of section
   34  215.555, Florida Statutes, is amended to read:
   35         215.555 Florida Hurricane Catastrophe Fund.—
   36         (2) DEFINITIONS.—As used in this section:
   37         (c) “Covered policy” means any insurance policy covering
   38  residential property in this state, including, but not limited
   39  to, a any homeowner, mobile home owner, farm owner, condominium
   40  association, condominium unit owner, tenant, or apartment
   41  building policy, or any other policy covering a residential
   42  structure or its contents issued by an any authorized insurer,
   43  including a commercial self-insurance fund holding a certificate
   44  of authority issued by the Office of Insurance Regulation under
   45  s. 624.462, the Citizens Property Insurance Corporation, and any
   46  joint underwriting association or similar entity created under
   47  law. The term “covered policy” includes any collateral
   48  protection insurance policy covering personal residences which
   49  protects both the borrower’s and the lender’s financial
   50  interests, in an amount at least equal to the coverage for the
   51  dwelling in place under the lapsed homeowner’s policy, if such
   52  policy can be accurately reported as required under in
   53  subsection (5). Additionally, Covered policies also include
   54  policies covering the peril of wind removed from the Florida
   55  Residential Property and Casualty Joint Underwriting Association
   56  or from the Citizens Property Insurance Corporation, created
   57  under s. 627.351(6), or from the Florida Windstorm Underwriting
   58  Association, created under s. 627.351(2), by an authorized
   59  insurer under the terms and conditions of an executed Citizens
   60  Property Insurance Corporation assumption or reinsurance
   61  agreement between the authorized insurer and the such
   62  association or Citizens Property Insurance corporation. Each
   63  assumption or reinsurance agreement between the association and
   64  such authorized insurer and the or Citizens Property Insurance
   65  corporation must be approved by the Office of Insurance
   66  Regulation before the effective date of the agreement
   67  assumption, and the office of Insurance Regulation must provide
   68  written notification to the board within 15 working days after
   69  such approval. The term “covered policy” does not include any
   70  policy that excludes wind coverage or hurricane coverage or any
   71  reinsurance agreement, other than a Citizens Property Insurance
   72  Corporation reinsurance agreement, and does not include any
   73  policy otherwise meeting this definition which is issued by a
   74  surplus lines insurer or a reinsurer. All commercial residential
   75  excess policies and all deductible buy-back policies that, based
   76  on sound actuarial principles, require individual ratemaking
   77  shall be excluded by rule if the actuarial soundness of the fund
   78  is not jeopardized. For this purpose, the term “excess policy”
   79  means a policy that provides insurance protection for large
   80  commercial property risks and that provides a layer of coverage
   81  above a primary layer insured by another insurer.
   82         Section 2. Subsection (4) of section 626.752, Florida
   83  Statutes, is amended to read:
   84         626.752 Exchange of business.—
   85         (4) The foregoing limitations and restrictions do shall not
   86  be construed and shall not apply to the placing of surplus lines
   87  business under the provisions of part VIII of this chapter or to
   88  the activities of Citizens Property Insurance Corporation in
   89  placing new and renewal business with authorized insurers in
   90  accordance with s. 627.3518 or in conjunction with efforts to
   91  reduce the size of the corporation pursuant to s. 627.351(6).
   92         Section 3. Paragraph (c) of subsection (6) of section
   93  627.351, Florida Statutes, is amended to read:
   94         627.351 Insurance risk apportionment plans.—
   95         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
   96         (c) The corporation’s plan of operation:
   97         1. Must provide for adoption of residential property and
   98  casualty insurance policy forms and commercial residential and
   99  nonresidential property insurance forms, which must be approved
  100  by the office before use. The corporation shall adopt the
  101  following policy forms:
  102         a. Standard personal lines policy forms that are
  103  comprehensive multiperil policies providing full coverage of a
  104  residential property equivalent to the coverage provided in the
  105  private insurance market under an HO-3, HO-4, or HO-6 policy.
  106         b. Basic personal lines policy forms that are policies
  107  similar to an HO-8 policy or a dwelling fire policy that provide
  108  coverage meeting the requirements of the secondary mortgage
  109  market, but which is more limited than the coverage under a
  110  standard policy.
  111         c. Commercial lines residential and nonresidential policy
  112  forms that are generally similar to the basic perils of full
  113  coverage obtainable for commercial residential structures and
  114  commercial nonresidential structures in the admitted voluntary
  115  market.
  116         d. Personal lines and commercial lines residential property
  117  insurance forms that cover the peril of wind only. Such The
  118  forms are applicable only to residential properties located in
  119  areas eligible for coverage under the coastal account referred
  120  to in sub-subparagraph (b)2.a.
  121         e. Commercial lines nonresidential property insurance forms
  122  that cover the peril of wind only. Such The forms are applicable
  123  only to nonresidential properties located in areas eligible for
  124  coverage under the coastal account referred to in sub
  125  subparagraph (b)2.a.
  126         f. The corporation may adopt variations of the policy forms
  127  listed in sub-subparagraphs a.-e. which contain more restrictive
  128  coverage.
  129         g. Effective January 1, 2013, the corporation shall offer a
  130  basic personal lines policy similar to an HO-8 policy with
  131  dwelling repair based on common construction materials and
  132  methods.
  133         2. Must provide that the corporation adopt a program for
  134  the purpose of encouraging and facilitating the removal of risks
  135  from the corporation in which the corporation offers reinsurance
  136  that may be proportional or nonproportional to and authorized
  137  insurers that are willing to assume risks from the corporation
  138  pursuant to terms and conditions that are acceptable to the
  139  corporation. The corporation’s participation in each agreement
  140  executed under the program may not exceed assumption of 80
  141  percent of the risk subject to the agreement enter into quota
  142  share primary insurance agreements for hurricane coverage, as
  143  defined in s. 627.4025(2)(a), for eligible risks, and adopt
  144  property insurance forms for eligible risks which cover the
  145  peril of wind only. Such agreement may provide for a decline in
  146  the corporation’s participation in the assumption of risk for a
  147  period of up to 5 years.
  148         a. As used in this subsection, the term:
  149         (I) “Quota share primary insurance” means an arrangement in
  150  which the primary hurricane coverage of an eligible risk is
  151  provided in specified percentages by the corporation and an
  152  authorized insurer. The corporation and authorized insurer are
  153  each solely responsible for a specified percentage of hurricane
  154  coverage of an eligible risk as set forth in a quota share
  155  primary insurance agreement between the corporation and an
  156  authorized insurer and the insurance contract. The
  157  responsibility of the corporation or authorized insurer to pay
  158  its specified percentage of hurricane losses of an eligible
  159  risk, as set forth in the agreement, may not be altered by the
  160  inability of the other party to pay its specified percentage of
  161  losses. Eligible risks that are provided hurricane coverage
  162  through a quota share primary insurance arrangement must be
  163  provided policy forms that set forth the obligations of the
  164  corporation and authorized insurer under the arrangement,
  165  clearly specify the percentages of quota share primary insurance
  166  provided by the corporation and authorized insurer, and
  167  conspicuously and clearly state that the authorized insurer and
  168  the corporation may not be held responsible beyond their
  169  specified percentage of coverage of hurricane losses.
  170         (II) “eligible risks” means personal lines residential and
  171  commercial lines residential risks that are currently insured by
  172  meet the underwriting criteria of the corporation and are
  173  located in areas that were eligible for coverage by the Florida
  174  Windstorm Underwriting Association on January 1, 2002.
  175         b. Entering into an excess-of-loss reinsurance agreement,
  176  quota share reinsurance agreement, or quota share primary
  177  insurance agreement between the corporation and an authorized
  178  insurer is voluntary and at the discretion of the authorized
  179  insurer.
  180         b. The corporation may enter into quota share primary
  181  insurance agreements with authorized insurers at corporation
  182  coverage levels of 90 percent and 50 percent.
  183         c. If the corporation determines that additional coverage
  184  levels are necessary to maximize participation in quota share
  185  primary insurance agreements by authorized insurers, the
  186  corporation may establish additional coverage levels. However,
  187  the corporation’s quota share primary insurance coverage level
  188  may not exceed 90 percent.
  189         d. Any quota share primary insurance agreement entered into
  190  between an authorized insurer and the corporation must provide
  191  for a uniform specified percentage of coverage of hurricane
  192  losses, by county or territory as set forth by the corporation
  193  board, for all eligible risks of the authorized insurer covered
  194  under the agreement.
  195         c.e. Any excess-of-loss reinsurance agreement, quota share
  196  reinsurance agreement, or quota share primary insurance
  197  agreement entered into between an authorized insurer and the
  198  corporation is subject to review and approval by the office.
  199  However, such agreement may shall be authorized only for as to
  200  insurance contracts entered into between an authorized insurer
  201  and an insured who is already insured by the corporation for
  202  wind coverage. If the corporation is the reinsurer, the
  203  insurance policy forms and endorsements offered by the
  204  authorized insurer must be approved by the office, cover all
  205  perils that are the subjects of the risk-sharing agreement, and
  206  cover at least the same limits as the corporation policies being
  207  replaced.
  208         d. The corporation may not share risk for extra contractual
  209  damages at common law or under s. 624.155.
  210         e.f. For all eligible risks covered under quota share
  211  primary insurance agreements, the exposure and coverage levels
  212  for both the corporation and authorized insurers must shall be
  213  reported by the corporation to the Florida Hurricane Catastrophe
  214  Fund. For all policies of eligible risks covered under such
  215  agreements, the corporation and the authorized insurer must
  216  maintain complete and accurate records for the purpose of
  217  exposure and loss reimbursement audits as required by fund
  218  rules. The corporation and the authorized insurer shall each
  219  maintain duplicate copies of policy declaration pages and
  220  supporting claims documents.
  221         f. To ensure that exposures are accurately reported to the
  222  Florida Hurricane Catastrophe Fund, the corporation and each
  223  insurer participating in the reinsurance program shall report
  224  its exposure under covered policies to the fund as required
  225  under s. 215.555(5)(c). Each report must also specify the
  226  percentage of liability applicable to the corporation and the
  227  percentage applicable to the insurer with respect to quota share
  228  and similar agreements, or the terms of the excess-of-loss
  229  agreement in the case of such an agreement. Pursuant to its
  230  authority under s. 215.555, the State Board of Administration
  231  shall adopt rules to administer this sub-subparagraph.
  232         g. The corporation board shall establish in its plan of
  233  operation standards for quota share agreements which ensure that
  234  there is no discriminatory application among insurers as to the
  235  terms of the agreements, pricing of the agreements, incentive
  236  provisions if any, and consideration paid for servicing policies
  237  or adjusting claims.
  238         h. The quota share primary insurance agreement between the
  239  corporation and an authorized insurer must set forth the
  240  specific terms under which coverage is provided, including, but
  241  not limited to, the sale and servicing of policies issued under
  242  the agreement by the insurance agent of the authorized insurer
  243  producing the business, the reporting of information concerning
  244  eligible risks, the payment of premium to the corporation, and
  245  arrangements for the adjustment and payment of hurricane claims
  246  incurred on eligible risks by the claims adjuster and personnel
  247  of the authorized insurer. Entering into a quota sharing
  248  insurance agreement between the corporation and an authorized
  249  insurer is voluntary and at the discretion of the authorized
  250  insurer.
  251         3. May provide that the corporation may employ or otherwise
  252  contract with individuals or other entities to provide
  253  administrative or professional services that may be appropriate
  254  to effectuate the plan. The corporation may borrow funds by
  255  issuing bonds or by incurring other indebtedness, and shall have
  256  other powers reasonably necessary to effectuate the requirements
  257  of this subsection, including, without limitation, the power to
  258  issue bonds and incur other indebtedness in order to refinance
  259  outstanding bonds or other indebtedness. The corporation may
  260  seek judicial validation of its bonds or other indebtedness
  261  under chapter 75. The corporation may issue bonds or incur other
  262  indebtedness, or have bonds issued on its behalf by a unit of
  263  local government pursuant to subparagraph (q)2. in the absence
  264  of a hurricane or other weather-related event, upon a
  265  determination by the corporation, subject to approval by the
  266  office, that such action would enable it to efficiently meet the
  267  financial obligations of the corporation and that such
  268  financings are reasonably necessary to effectuate the
  269  requirements of this subsection. The corporation may take all
  270  actions needed to facilitate tax-free status for such bonds or
  271  indebtedness, including formation of trusts or other affiliated
  272  entities. The corporation may pledge assessments, projected
  273  recoveries from the Florida Hurricane Catastrophe Fund, other
  274  reinsurance recoverables, policyholder surcharges and other
  275  surcharges, and other funds available to the corporation as
  276  security for bonds or other indebtedness. In recognition of s.
  277  10, Art. I of the State Constitution, prohibiting the impairment
  278  of obligations of contracts, it is the intent of the Legislature
  279  that no action may not be taken whose purpose is to impair any
  280  bond indenture or financing agreement or any revenue source
  281  committed by contract to such bond or other indebtedness.
  282         4. Must require that the corporation operate subject to the
  283  supervision and approval of a board of governors consisting of
  284  nine individuals who are residents of this state and who are
  285  from different geographical areas of the state, one of whom is
  286  appointed by the Governor and serves solely to advocate on
  287  behalf of the consumer. The appointment of a consumer
  288  representative by the Governor is in addition to the
  289  appointments authorized under sub-subparagraph a.
  290         a. The Governor, the Chief Financial Officer, the President
  291  of the Senate, and the Speaker of the House of Representatives
  292  shall each appoint two members of the board. At least one of the
  293  two members appointed by each appointing officer must have
  294  demonstrated expertise in insurance and be deemed to be within
  295  the scope of the exemption provided in s. 112.313(7)(b). The
  296  Chief Financial Officer shall designate one of the appointees as
  297  chair. All board members serve at the pleasure of the appointing
  298  officer. All members of the board are subject to removal at will
  299  by the officers who appointed them. All board members, including
  300  the chair, must be appointed to serve for 3-year terms beginning
  301  annually on a date designated by the plan. However, for the
  302  first term beginning on or after July 1, 2009, each appointing
  303  officer shall appoint one member of the board for a 2-year term
  304  and one member for a 3-year term. A board vacancy shall be
  305  filled for the unexpired term by the appointing officer. The
  306  Chief Financial Officer shall appoint a technical advisory group
  307  to provide information and advice to the board in connection
  308  with the board’s duties under this subsection. The executive
  309  director and senior managers of the corporation shall be engaged
  310  by the board and serve at the pleasure of the board. Any
  311  executive director appointed on or after July 1, 2006, is
  312  subject to confirmation by the Senate. The executive director is
  313  responsible for employing other staff as the corporation may
  314  require, subject to review and concurrence by the board.
  315         b. The board shall create a Market Accountability Advisory
  316  Committee to assist the corporation in developing awareness of
  317  its rates and its customer and agent service levels in
  318  relationship to the voluntary market insurers writing similar
  319  coverage.
  320         (I) The members of the advisory committee consist of the
  321  following 11 persons, one of whom must be elected chair by the
  322  members of the committee: four representatives, one appointed by
  323  the Florida Association of Insurance Agents, one by the Florida
  324  Association of Insurance and Financial Advisors, one by the
  325  Professional Insurance Agents of Florida, and one by the Latin
  326  American Association of Insurance Agencies; three
  327  representatives appointed by the insurers with the three highest
  328  voluntary market share of residential property insurance
  329  business in the state; one representative from the Office of
  330  Insurance Regulation; one consumer appointed by the board who is
  331  insured by the corporation at the time of appointment to the
  332  committee; one representative appointed by the Florida
  333  Association of Realtors; and one representative appointed by the
  334  Florida Bankers Association. All members shall be appointed to
  335  3-year terms and may serve for consecutive terms.
  336         (II) The committee shall report to the corporation at each
  337  board meeting on insurance market issues that which may include
  338  rates and rate competition within with the voluntary market;
  339  service, including policy issuance, claims processing, and
  340  general responsiveness to policyholders, applicants, and agents;
  341  and matters relating to depopulation.
  342         5. Must provide a procedure for determining the eligibility
  343  of a risk for coverage, as follows:
  344         a. Subject to s. 627.3517, with respect to personal lines
  345  residential risks, if the risk is offered new or renewal
  346  coverage from an authorized insurer at the insurer’s approved
  347  rate under a standard policy including wind coverage or, if
  348  consistent with the insurer’s underwriting rules as filed with
  349  the office, a new or renewal basic policy including wind
  350  coverage, for a new or renewal application to the corporation
  351  for coverage, the risk is not eligible for any new or renewal
  352  policy issued by the corporation unless the premium for coverage
  353  from the authorized insurer is more than 15 percent greater than
  354  the premium for comparable coverage from the corporation.
  355  Whenever an offer of coverage for a personal lines residential
  356  risk is received for a policyholder of the corporation at
  357  renewal from an authorized insurer, if the offer is equal to or
  358  less than the corporation’s renewal premium for comparable
  359  coverage, the risk is not eligible for coverage with the
  360  corporation. If the risk is not able to obtain such offer, the
  361  risk is eligible for a standard policy including wind coverage
  362  or a basic policy including wind coverage issued by the
  363  corporation; however, if the risk could not be insured under a
  364  standard policy including wind coverage regardless of market
  365  conditions, the risk is eligible for a basic policy including
  366  wind coverage unless rejected under subparagraph 8. However, a
  367  policyholder removed from the corporation through an assumption
  368  agreement remains eligible for coverage from the corporation
  369  until the end of the assumption period. The corporation shall
  370  determine the type of policy to be provided on the basis of
  371  objective standards specified in the underwriting manual and
  372  based on generally accepted underwriting practices.
  373         (I) If the risk accepts an offer of coverage through the
  374  market assistance plan or through a mechanism established by the
  375  corporation other than a plan established by s. 627.3518, before
  376  a policy is issued to the risk by the corporation or during the
  377  first 30 days of coverage by the corporation, and the producing
  378  agent who submitted the application to the plan or to the
  379  corporation is not currently appointed by the insurer, the
  380  insurer shall:
  381         (A) Pay to the producing agent of record of the policy for
  382  the first year, an amount that is the greater of the insurer’s
  383  usual and customary commission for the type of policy written or
  384  a fee equal to the usual and customary commission of the
  385  corporation; or
  386         (B) Offer to allow the producing agent of record of the
  387  policy to continue servicing the policy for at least 1 year and
  388  offer to pay the agent the greater of the insurer’s or the
  389  corporation’s usual and customary commission for the type of
  390  policy written.
  391  
  392  If the producing agent is unwilling or unable to accept
  393  appointment, the new insurer shall pay the agent in accordance
  394  with sub-sub-sub-subparagraph (A).
  395         (II) If the corporation enters into a contractual agreement
  396  for a take-out plan, the producing agent of record of the
  397  corporation policy is entitled to retain any unearned commission
  398  on the policy, and the insurer shall:
  399         (A) Pay to the producing agent of record, for the first
  400  year, an amount that is the greater of the insurer’s usual and
  401  customary commission for the type of policy written or a fee
  402  equal to the usual and customary commission of the corporation;
  403  or
  404         (B) Offer to allow the producing agent of record to
  405  continue servicing the policy for at least 1 year and offer to
  406  pay the agent the greater of the insurer’s or the corporation’s
  407  usual and customary commission for the type of policy written.
  408  
  409  If the producing agent is unwilling or unable to accept
  410  appointment, the new insurer shall pay the agent in accordance
  411  with sub-sub-sub-subparagraph (A).
  412         b. With respect to commercial lines residential risks, for
  413  a new application to the corporation for coverage, if the risk
  414  is offered coverage under a policy including wind coverage from
  415  an authorized insurer at its approved rate, the risk is not
  416  eligible for a policy issued by the corporation unless the
  417  premium for coverage from the authorized insurer is more than 15
  418  percent greater than the premium for comparable coverage from
  419  the corporation. Whenever an offer of coverage for a commercial
  420  lines residential risk is received for a policyholder of the
  421  corporation at renewal from an authorized insurer, if the offer
  422  is equal to or less than the corporation’s renewal premium for
  423  comparable coverage, the risk is not eligible for coverage with
  424  the corporation. If the risk is not able to obtain any such
  425  offer, the risk is eligible for a policy including wind coverage
  426  issued by the corporation. However, a policyholder removed from
  427  the corporation through an assumption agreement remains eligible
  428  for coverage from the corporation until the end of the
  429  assumption period.
  430         (I) If the risk accepts an offer of coverage through the
  431  market assistance plan or through a mechanism established by the
  432  corporation other than a plan established by s. 627.3518, before
  433  a policy is issued to the risk by the corporation or during the
  434  first 30 days of coverage by the corporation, and the producing
  435  agent who submitted the application to the plan or the
  436  corporation is not currently appointed by the insurer, the
  437  insurer shall:
  438         (A) Pay to the producing agent of record of the policy, for
  439  the first year, an amount that is the greater of the insurer’s
  440  usual and customary commission for the type of policy written or
  441  a fee equal to the usual and customary commission of the
  442  corporation; or
  443         (B) Offer to allow the producing agent of record of the
  444  policy to continue servicing the policy for at least 1 year and
  445  offer to pay the agent the greater of the insurer’s or the
  446  corporation’s usual and customary commission for the type of
  447  policy written.
  448  
  449  If the producing agent is unwilling or unable to accept
  450  appointment, the new insurer shall pay the agent in accordance
  451  with sub-sub-sub-subparagraph (A).
  452         (II) If the corporation enters into a contractual agreement
  453  for a take-out plan, the producing agent of record of the
  454  corporation policy is entitled to retain any unearned commission
  455  on the policy, and the insurer shall:
  456         (A) Pay to the producing agent of record, for the first
  457  year, an amount that is the greater of the insurer’s usual and
  458  customary commission for the type of policy written or a fee
  459  equal to the usual and customary commission of the corporation;
  460  or
  461         (B) Offer to allow the producing agent of record to
  462  continue servicing the policy for at least 1 year and offer to
  463  pay the agent the greater of the insurer’s or the corporation’s
  464  usual and customary commission for the type of policy written.
  465  
  466  If the producing agent is unwilling or unable to accept
  467  appointment, the new insurer shall pay the agent in accordance
  468  with sub-sub-sub-subparagraph (A).
  469         c. For purposes of determining comparable coverage under
  470  sub-subparagraphs a. and b., the comparison must be based on
  471  those forms and coverages that are reasonably comparable. The
  472  corporation may rely on a determination of comparable coverage
  473  and premium made by the producing agent who submits the
  474  application to the corporation, made in the agent’s capacity as
  475  the corporation’s agent. A comparison may be made solely of the
  476  premium with respect to the main building or structure only on
  477  the following basis: the same coverage A or other building
  478  limits; the same percentage hurricane deductible that applies on
  479  an annual basis or that applies to each hurricane for commercial
  480  residential property; the same percentage of ordinance and law
  481  coverage, if the same limit is offered by both the corporation
  482  and the authorized insurer; the same mitigation credits, to the
  483  extent the same types of credits are offered both by the
  484  corporation and the authorized insurer; the same method for loss
  485  payment, such as replacement cost or actual cash value, if the
  486  same method is offered both by the corporation and the
  487  authorized insurer in accordance with underwriting rules; and
  488  any other form or coverage that is reasonably comparable as
  489  determined by the board. If an application is submitted to the
  490  corporation for wind-only coverage in the coastal account, the
  491  premium for the corporation’s wind-only policy plus the premium
  492  for the ex-wind policy that is offered by an authorized insurer
  493  to the applicant must be compared to the premium for multiperil
  494  coverage offered by an authorized insurer, subject to the
  495  standards for comparison specified in this subparagraph. If the
  496  corporation or the applicant requests from the authorized
  497  insurer a breakdown of the premium of the offer by types of
  498  coverage so that a comparison may be made by the corporation or
  499  its agent and the authorized insurer refuses or is unable to
  500  provide such information, the corporation may treat the offer as
  501  not being an offer of coverage from an authorized insurer at the
  502  insurer’s approved rate.
  503         6. Must include rules for classifications of risks and
  504  rates.
  505         7. Must provide that if premium and investment income for
  506  an account attributable to a particular calendar year are in
  507  excess of projected losses and expenses for the account
  508  attributable to that year, such excess shall be held in surplus
  509  in the account. Such surplus must be available to defray
  510  deficits in that account as to future years and used for that
  511  purpose before assessing assessable insurers and assessable
  512  insureds as to any calendar year.
  513         8. Must provide objective criteria and procedures to be
  514  uniformly applied to all applicants in determining whether an
  515  individual risk is so hazardous as to be uninsurable. In making
  516  this determination and in establishing the criteria and
  517  procedures, the following must be considered:
  518         a. Whether the likelihood of a loss for the individual risk
  519  is substantially higher than for other risks of the same class;
  520  and
  521         b. Whether the uncertainty associated with the individual
  522  risk is such that an appropriate premium cannot be determined.
  523  
  524  The acceptance or rejection of a risk by the corporation shall
  525  be construed as the private placement of insurance, and the
  526  provisions of chapter 120 do not apply.
  527         9. Must provide that the corporation make its best efforts
  528  to procure catastrophe reinsurance at reasonable rates, to cover
  529  its projected 100-year probable maximum loss as determined by
  530  the board of governors.
  531         10. The policies issued by the corporation must provide
  532  that if the corporation or the market assistance plan obtains an
  533  offer from an authorized insurer to cover the risk at its
  534  approved rates, the risk is no longer eligible for renewal
  535  through the corporation, except as otherwise provided in this
  536  subsection.
  537         11. Corporation policies and applications must include a
  538  notice that the corporation policy could, under this section, be
  539  replaced with a policy issued by an authorized insurer which
  540  does not provide coverage identical to the coverage provided by
  541  the corporation. The notice must also specify that acceptance of
  542  corporation coverage creates a conclusive presumption that the
  543  applicant or policyholder is aware of this potential.
  544         12. May establish, subject to approval by the office,
  545  different eligibility requirements and operational procedures
  546  for any line or type of coverage for any specified county or
  547  area if the board determines that such changes are justified due
  548  to the voluntary market being sufficiently stable and
  549  competitive in such area or for such line or type of coverage
  550  and that consumers who, in good faith, are unable to obtain
  551  insurance through the voluntary market through ordinary methods
  552  continue to have access to coverage from the corporation. If
  553  coverage is sought in connection with a real property transfer,
  554  the requirements and procedures may not provide an effective
  555  date of coverage later than the date of the closing of the
  556  transfer as established by the transferor, the transferee, and,
  557  if applicable, the lender.
  558         13. Must provide that, with respect to the coastal account,
  559  any assessable insurer with a surplus as to policyholders of $25
  560  million or less writing 25 percent or more of its total
  561  countrywide property insurance premiums in this state may
  562  petition the office, within the first 90 days of each calendar
  563  year, to qualify as a limited apportionment company. A regular
  564  assessment levied by the corporation on a limited apportionment
  565  company for a deficit incurred by the corporation for the
  566  coastal account may be paid to the corporation on a monthly
  567  basis as the assessments are collected by the limited
  568  apportionment company from its insureds, but a limited
  569  apportionment company must begin collecting the regular
  570  assessments not later than 90 days after the regular assessments
  571  are levied by the corporation, and the regular assessments must
  572  be paid in full within 15 months after being levied by the
  573  corporation. A limited apportionment company shall collect from
  574  its policyholders any emergency assessment imposed under sub
  575  subparagraph (b)3.d. The plan must provide that, if the office
  576  determines that any regular assessment will result in an
  577  impairment of the surplus of a limited apportionment company,
  578  the office may direct that all or part of such assessment be
  579  deferred as provided in subparagraph (q)4. However, an emergency
  580  assessment to be collected from policyholders under sub
  581  subparagraph (b)3.d. may not be limited or deferred.
  582         14. Must provide that the corporation appoint as its
  583  licensed agents only those agents who also hold an appointment
  584  as defined in s. 626.015(3) with an insurer who at the time of
  585  the agent’s initial appointment by the corporation is authorized
  586  to write and is actually writing personal lines residential
  587  property coverage, commercial residential property coverage, or
  588  commercial nonresidential property coverage within the state.
  589         15. Must provide a premium payment plan option to its
  590  policyholders which, at a minimum, allows for quarterly and
  591  semiannual payment of premiums. A monthly payment plan may, but
  592  is not required to, be offered.
  593         16. Must limit coverage on mobile homes or manufactured
  594  homes built before 1994 to actual cash value of the dwelling
  595  rather than replacement costs of the dwelling.
  596         17. Must provide coverage for manufactured or mobile home
  597  dwellings. Such coverage must also include the following
  598  attached structures:
  599         a. Screened enclosures that are aluminum framed or screened
  600  enclosures that are not covered by the same or substantially the
  601  same materials as those of the primary dwelling;
  602         b. Carports that are aluminum or carports that are not
  603  covered by the same or substantially the same materials as those
  604  of the primary dwelling; and
  605         c. Patios that have a roof covering that is constructed of
  606  materials that are not the same or substantially the same
  607  materials as those of the primary dwelling.
  608  
  609  The corporation shall make available a policy for mobile homes
  610  or manufactured homes for a minimum insured value of at least
  611  $3,000.
  612         18. May provide such limits of coverage as the board
  613  determines, consistent with the requirements of this subsection.
  614         19. May require commercial property to meet specified
  615  hurricane mitigation construction features as a condition of
  616  eligibility for coverage.
  617         20. Must provide that new or renewal policies issued by the
  618  corporation on or after January 1, 2012, which cover sinkhole
  619  loss do not include coverage for any loss to appurtenant
  620  structures, driveways, sidewalks, decks, or patios that are
  621  directly or indirectly caused by sinkhole activity. The
  622  corporation shall exclude such coverage using a notice of
  623  coverage change, which may be included with the policy renewal,
  624  and not by issuance of a notice of nonrenewal of the excluded
  625  coverage upon renewal of the current policy.
  626         21. As of January 1, 2012, must require that the agent
  627  obtain from an applicant for coverage from the corporation an
  628  acknowledgment signed by the applicant, which includes, at a
  629  minimum, the following statement:
  630  
  631                ACKNOWLEDGMENT OF POTENTIAL SURCHARGE              
  632                      AND ASSESSMENT LIABILITY:                    
  633  
  634         1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
  635  CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
  636  DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
  637  MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
  638  PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
  639  POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
  640  OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
  641  LEGISLATURE.
  642         2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
  643  SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM,
  644  BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
  645  BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN
  646  PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
  647  WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
  648  ARE REGULATED AND APPROVED BY THE STATE.
  649         3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
  650  ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
  651  INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
  652  FLORIDA LEGISLATURE.
  653         4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
  654  CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
  655  STATE OF FLORIDA.
  656         a. The corporation shall maintain, in electronic format or
  657  otherwise, a copy of the applicant’s signed acknowledgment and
  658  provide a copy of the statement to the policyholder as part of
  659  the first renewal after the effective date of this subparagraph.
  660         b. The signed acknowledgment form creates a conclusive
  661  presumption that the policyholder understood and accepted his or
  662  her potential surcharge and assessment liability as a
  663  policyholder of the corporation.
  664         Section 4. This act shall take effect July 1, 2015.

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