Bill Text: FL S1428 | 2024 | Regular Session | Introduced


Bill Title: Coverage by the Citizens Property Insurance Corporation

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2024-03-08 - Died in Banking and Insurance [S1428 Detail]

Download: Florida-2024-S1428-Introduced.html
       Florida Senate - 2024                                    SB 1428
       
       
        
       By Senator DiCeglie
       
       
       
       
       
       18-01005A-24                                          20241428__
    1                        A bill to be entitled                      
    2         An act relating to coverage by the Citizens Property
    3         Insurance Corporation; amending s. 627.351, F.S.;
    4         revising the types of policies included in specified
    5         accounts of the Citizens Property Insurance
    6         Corporation; revising the requirements for areas that
    7         are eligible for certain personal residential and
    8         commercial residential and commercial nonresidential
    9         policy coverages by the corporation; authorizing the
   10         corporation to amend wind-eligible areas under certain
   11         circumstances; authorizing the corporation to consider
   12         certain factors in developing new eligibility criteria
   13         and rates for policies that provide wind-only
   14         coverage; providing that such rates are subject to
   15         specified provisions; requiring that such eligibility
   16         criteria and rates be submitted to the Legislature for
   17         review and approval; providing that the Office of
   18         Insurance Regulation may implement eligibility
   19         criteria and rates only upon approval by the
   20         Legislature; defining the term “wind-eligible area”;
   21         providing an effective date.
   22          
   23  Be It Enacted by the Legislature of the State of Florida:
   24  
   25         Section 1. Present subsection (7) of section 627.351,
   26  Florida Statutes, is redesignated as subsection (8), a new
   27  subsection (7) is added to that section, and paragraph (b) of
   28  subsection (6) and present subsection (7) are amended, to read
   29         627.351 Insurance risk apportionment plans.—
   30         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
   31         (b)1. All insurers authorized to write one or more subject
   32  lines of business in this state are subject to assessment by the
   33  corporation and, for the purposes of this subsection, are
   34  referred to collectively as “assessable insurers.” Insurers
   35  writing one or more subject lines of business in this state
   36  pursuant to part VIII of chapter 626 are not assessable
   37  insurers; however, insureds who procure one or more subject
   38  lines of business in this state pursuant to part VIII of chapter
   39  626 are subject to assessment by the corporation and are
   40  referred to collectively as “assessable insureds.” An insurer’s
   41  assessment liability begins on the first day of the calendar
   42  year following the year in which the insurer was issued a
   43  certificate of authority to transact insurance for subject lines
   44  of business in this state and terminates 1 year after the end of
   45  the first calendar year during which the insurer no longer holds
   46  a certificate of authority to transact insurance for subject
   47  lines of business in this state.
   48         2.a. All revenues, assets, liabilities, losses, and
   49  expenses of the corporation shall be divided into three separate
   50  accounts as follows:
   51         (I) A personal lines account for personal residential
   52  policies issued by the corporation which provides comprehensive,
   53  multiperil coverage on risks that are not located in areas
   54  eligible for coverage by the Florida Windstorm Underwriting
   55  Association as those areas were defined on January 1, 2002, or
   56  included as eligible for coverage by the corporation and for
   57  policies that do not provide coverage for the peril of wind on
   58  risks that are located in such areas;
   59         (II) A commercial lines account for commercial residential
   60  and commercial nonresidential policies issued by the corporation
   61  which provides coverage for basic property perils on risks that
   62  are not located in areas eligible for coverage by the Florida
   63  Windstorm Underwriting Association as those areas were defined
   64  on January 1, 2002, or included as eligible for coverage by the
   65  corporation and for policies that do not provide coverage for
   66  the peril of wind on risks that are located in such areas; and
   67         (III) A coastal account for personal residential policies
   68  and commercial residential and commercial nonresidential
   69  property policies issued by the corporation which provides
   70  coverage for the peril of wind on risks that are located in
   71  areas eligible for coverage by the Florida Windstorm
   72  Underwriting Association as those areas were defined on January
   73  1, 2002, or included as eligible for coverage by the
   74  corporation. The corporation may offer policies that provide
   75  multiperil coverage and shall offer policies that provide
   76  coverage only for the peril of wind for risks located in areas
   77  eligible for coverage in the coastal account. Effective July 1,
   78  2014, the corporation shall cease offering new commercial
   79  residential policies providing multiperil coverage and shall
   80  instead continue to offer commercial residential wind-only
   81  policies, and may offer commercial residential policies
   82  excluding wind. The corporation may, however, continue to renew
   83  a commercial residential multiperil policy on a building that is
   84  insured by the corporation on June 30, 2014, under a multiperil
   85  policy. In issuing multiperil coverage, the corporation may use
   86  its approved policy forms and rates for the personal lines
   87  account. An applicant or insured who is eligible to purchase a
   88  multiperil policy from the corporation may purchase a multiperil
   89  policy from an authorized insurer without prejudice to the
   90  applicant’s or insured’s eligibility to prospectively purchase a
   91  policy that provides coverage only for the peril of wind from
   92  the corporation. An applicant or insured who is eligible for a
   93  corporation policy that provides coverage only for the peril of
   94  wind may elect to purchase or retain such policy and also
   95  purchase or retain coverage excluding wind from an authorized
   96  insurer without prejudice to the applicant’s or insured’s
   97  eligibility to prospectively purchase a policy that provides
   98  multiperil coverage from the corporation. It is the goal of the
   99  Legislature that there be an overall average savings of 10
  100  percent or more for a policyholder who currently has a wind-only
  101  policy with the corporation, and an ex-wind policy with a
  102  voluntary insurer or the corporation, and who obtains a
  103  multiperil policy from the corporation. It is the intent of the
  104  Legislature that the offer of multiperil coverage in the coastal
  105  account be made and implemented in a manner that does not
  106  adversely affect the tax-exempt status of the corporation or
  107  creditworthiness of or security for currently outstanding
  108  financing obligations or credit facilities of the coastal
  109  account, the personal lines account, or the commercial lines
  110  account. The coastal account must also include quota share
  111  primary insurance under subparagraph (c)2. The area eligible for
  112  coverage under the coastal account also includes the area within
  113  Port Canaveral, which is bordered on the south by the City of
  114  Cape Canaveral, bordered on the west by the Banana River, and
  115  bordered on the north by Federal Government property.
  116         b. The three separate accounts must be maintained as long
  117  as financing obligations entered into by the Florida Windstorm
  118  Underwriting Association or Residential Property and Casualty
  119  Joint Underwriting Association are outstanding, in accordance
  120  with the terms of the corresponding financing documents. If no
  121  such financing obligations remain outstanding or if the
  122  financing documents allow for combining of accounts, the
  123  corporation may consolidate the three separate accounts into a
  124  new account, to be known as the Citizens account, for all
  125  revenues, assets, liabilities, losses, and expenses of the
  126  corporation. The Citizens account, if established by the
  127  corporation, is authorized to provide coverage to the same
  128  extent as provided under each of the three separate accounts.
  129  The authority to provide coverage under the Citizens account is
  130  set forth in subparagraph 4. Consistent with this subparagraph
  131  and prudent investment policies that minimize the cost of
  132  carrying debt, the board shall exercise its best efforts to
  133  retire existing debt or obtain the approval of necessary parties
  134  to amend the terms of existing debt, so as to structure the most
  135  efficient plan for consolidating the three separate accounts
  136  into a single account. Once the accounts are combined into one
  137  account, this subparagraph and subparagraph 3. shall be replaced
  138  in their entirety by subparagraphs 4. and 5.
  139         c. Creditors of the Residential Property and Casualty Joint
  140  Underwriting Association and the accounts specified in sub-sub
  141  subparagraphs a.(I) and (II) may have a claim against, and
  142  recourse to, those accounts and no claim against, or recourse
  143  to, the account referred to in sub-sub-subparagraph a.(III).
  144  Creditors of the Florida Windstorm Underwriting Association have
  145  a claim against, and recourse to, the account referred to in
  146  sub-sub-subparagraph a.(III) and no claim against, or recourse
  147  to, the accounts referred to in sub-sub-subparagraphs a.(I) and
  148  (II).
  149         d. Revenues, assets, liabilities, losses, and expenses not
  150  attributable to particular accounts shall be prorated among the
  151  accounts.
  152         e. The Legislature finds that the revenues of the
  153  corporation are revenues that are necessary to meet the
  154  requirements set forth in documents authorizing the issuance of
  155  bonds under this subsection.
  156         f. The income of the corporation may not inure to the
  157  benefit of any private person.
  158         3. With respect to a deficit in an account:
  159         a. After accounting for the Citizens policyholder surcharge
  160  imposed under sub-subparagraph j., if the remaining projected
  161  deficit incurred in the coastal account in a particular calendar
  162  year:
  163         (I) Is not greater than 2 percent of the aggregate
  164  statewide direct written premium for the subject lines of
  165  business for the prior calendar year, the entire deficit shall
  166  be recovered through regular assessments of assessable insurers
  167  under paragraph (q) and assessable insureds.
  168         (II) Exceeds 2 percent of the aggregate statewide direct
  169  written premium for the subject lines of business for the prior
  170  calendar year, the corporation shall levy regular assessments on
  171  assessable insurers under paragraph (q) and on assessable
  172  insureds in an amount equal to the greater of 2 percent of the
  173  projected deficit or 2 percent of the aggregate statewide direct
  174  written premium for the subject lines of business for the prior
  175  calendar year. Any remaining projected deficit shall be
  176  recovered through emergency assessments under sub-subparagraph
  177  e.
  178         b. Each assessable insurer’s share of the amount being
  179  assessed under sub-subparagraph a. must be in the proportion
  180  that the assessable insurer’s direct written premium for the
  181  subject lines of business for the year preceding the assessment
  182  bears to the aggregate statewide direct written premium for the
  183  subject lines of business for that year. The assessment
  184  percentage applicable to each assessable insured is the ratio of
  185  the amount being assessed under sub-subparagraph a. to the
  186  aggregate statewide direct written premium for the subject lines
  187  of business for the prior year. Assessments levied by the
  188  corporation on assessable insurers under sub-subparagraph a.
  189  must be paid as required by the corporation’s plan of operation
  190  and paragraph (q). Assessments levied by the corporation on
  191  assessable insureds under sub-subparagraph a. shall be collected
  192  by the surplus lines agent at the time the surplus lines agent
  193  collects the surplus lines tax required by s. 626.932, and paid
  194  to the Florida Surplus Lines Service Office at the time the
  195  surplus lines agent pays the surplus lines tax to that office.
  196  Upon receipt of regular assessments from surplus lines agents,
  197  the Florida Surplus Lines Service Office shall transfer the
  198  assessments directly to the corporation as determined by the
  199  corporation.
  200         c. The corporation may not levy regular assessments under
  201  paragraph (q) pursuant to sub-subparagraph a. or sub
  202  subparagraph b. if the three separate accounts in sub-sub
  203  subparagraphs 2.a.(I)-(III) have been consolidated into the
  204  Citizens account pursuant to sub-subparagraph 2.b. However, the
  205  outstanding balance of any regular assessment levied by the
  206  corporation before establishment of the Citizens account remains
  207  payable to the corporation.
  208         d. After accounting for the Citizens policyholder surcharge
  209  imposed under sub-subparagraph j., the remaining projected
  210  deficits in the personal lines account and in the commercial
  211  lines account in a particular calendar year shall be recovered
  212  through emergency assessments under sub-subparagraph e.
  213         e. Upon a determination by the board of governors that a
  214  projected deficit in an account exceeds the amount that is
  215  expected to be recovered through regular assessments under sub
  216  subparagraph a., plus the amount that is expected to be
  217  recovered through surcharges under sub-subparagraph j., the
  218  board, after verification by the office, shall levy emergency
  219  assessments for as many years as necessary to cover the
  220  deficits, to be collected by assessable insurers and the
  221  corporation and collected from assessable insureds upon issuance
  222  or renewal of policies for subject lines of business, excluding
  223  National Flood Insurance policies. The amount collected in a
  224  particular year must be a uniform percentage of that year’s
  225  direct written premium for subject lines of business and all
  226  accounts of the corporation, excluding National Flood Insurance
  227  Program policy premiums, as annually determined by the board and
  228  verified by the office. The office shall verify the arithmetic
  229  calculations involved in the board’s determination within 30
  230  days after receipt of the information on which the determination
  231  was based. The office shall notify assessable insurers and the
  232  Florida Surplus Lines Service Office of the date on which
  233  assessable insurers shall begin to collect and assessable
  234  insureds shall begin to pay such assessment. The date must be at
  235  least 90 days after the date the corporation levies emergency
  236  assessments pursuant to this sub-subparagraph. Notwithstanding
  237  any other provision of law, the corporation and each assessable
  238  insurer that writes subject lines of business shall collect
  239  emergency assessments from its policyholders without such
  240  obligation being affected by any credit, limitation, exemption,
  241  or deferment. Emergency assessments levied by the corporation on
  242  assessable insureds shall be collected by the surplus lines
  243  agent at the time the surplus lines agent collects the surplus
  244  lines tax required by s. 626.932 and paid to the Florida Surplus
  245  Lines Service Office at the time the surplus lines agent pays
  246  the surplus lines tax to that office. The emergency assessments
  247  collected shall be transferred directly to the corporation on a
  248  periodic basis as determined by the corporation and held by the
  249  corporation solely in the applicable account. The aggregate
  250  amount of emergency assessments levied for an account in any
  251  calendar year may be less than but may not exceed the greater of
  252  10 percent of the amount needed to cover the deficit, plus
  253  interest, fees, commissions, required reserves, and other costs
  254  associated with financing the original deficit, or 10 percent of
  255  the aggregate statewide direct written premium for subject lines
  256  of business and all accounts of the corporation for the prior
  257  year, plus interest, fees, commissions, required reserves, and
  258  other costs associated with financing the deficit.
  259         f. The corporation may pledge the proceeds of assessments,
  260  projected recoveries from the Florida Hurricane Catastrophe
  261  Fund, other insurance and reinsurance recoverables, policyholder
  262  surcharges and other surcharges, and other funds available to
  263  the corporation as the source of revenue for and to secure bonds
  264  issued under paragraph (q), bonds or other indebtedness issued
  265  under subparagraph (c)3., or lines of credit or other financing
  266  mechanisms issued or created under this subsection, or to retire
  267  any other debt incurred as a result of deficits or events giving
  268  rise to deficits, or in any other way that the board determines
  269  will efficiently recover such deficits. The purpose of the lines
  270  of credit or other financing mechanisms is to provide additional
  271  resources to assist the corporation in covering claims and
  272  expenses attributable to a catastrophe. As used in this
  273  subsection, the term “assessments” includes regular assessments
  274  under sub-subparagraph a. or subparagraph (q)1. and emergency
  275  assessments under sub-subparagraph e. Emergency assessments
  276  collected under sub-subparagraph e. are not part of an insurer’s
  277  rates, are not premium, and are not subject to premium tax,
  278  fees, or commissions; however, failure to pay the emergency
  279  assessment shall be treated as failure to pay premium. The
  280  emergency assessments shall continue as long as any bonds issued
  281  or other indebtedness incurred with respect to a deficit for
  282  which the assessment was imposed remain outstanding, unless
  283  adequate provision has been made for the payment of such bonds
  284  or other indebtedness pursuant to the documents governing such
  285  bonds or indebtedness.
  286         g. As used in this subsection for purposes of any deficit
  287  incurred on or after January 25, 2007, the term “subject lines
  288  of business” means insurance written by assessable insurers or
  289  procured by assessable insureds for all property and casualty
  290  lines of business in this state, but not including workers’
  291  compensation or medical malpractice. As used in this sub
  292  subparagraph, the term “property and casualty lines of business”
  293  includes all lines of business identified on Form 2, Exhibit of
  294  Premiums and Losses, in the annual statement required of
  295  authorized insurers under s. 624.424 and any rule adopted under
  296  this section, except for those lines identified as accident and
  297  health insurance and except for policies written under the
  298  National Flood Insurance Program or the Federal Crop Insurance
  299  Program. For purposes of this sub-subparagraph, the term
  300  “workers’ compensation” includes both workers’ compensation
  301  insurance and excess workers’ compensation insurance.
  302         h. The Florida Surplus Lines Service Office shall determine
  303  annually the aggregate statewide written premium in subject
  304  lines of business procured by assessable insureds and report
  305  that information to the corporation in a form and at a time the
  306  corporation specifies to ensure that the corporation can meet
  307  the requirements of this subsection and the corporation’s
  308  financing obligations.
  309         i. The Florida Surplus Lines Service Office shall verify
  310  the proper application by surplus lines agents of assessment
  311  percentages for regular assessments and emergency assessments
  312  levied under this subparagraph on assessable insureds and assist
  313  the corporation in ensuring the accurate, timely collection and
  314  payment of assessments by surplus lines agents as required by
  315  the corporation.
  316         j. Upon determination by the board of governors that an
  317  account has a projected deficit, the board shall levy a Citizens
  318  policyholder surcharge against all policyholders of the
  319  corporation.
  320         (I) The surcharge shall be levied as a uniform percentage
  321  of the premium for the policy of up to 15 percent of such
  322  premium, which funds shall be used to offset the deficit.
  323         (II) The surcharge is payable upon cancellation or
  324  termination of the policy, upon renewal of the policy, or upon
  325  issuance of a new policy by the corporation within the first 12
  326  months after the date of the levy or the period of time
  327  necessary to fully collect the surcharge amount.
  328         (III) The corporation may not levy any regular assessments
  329  under paragraph (q) pursuant to sub-subparagraph a. or sub
  330  subparagraph b. with respect to a particular year’s deficit
  331  until the corporation has first levied the full amount of the
  332  surcharge authorized by this sub-subparagraph.
  333         (IV) The surcharge is not considered premium and is not
  334  subject to commissions, fees, or premium taxes. However, failure
  335  to pay the surcharge shall be treated as failure to pay premium.
  336         k. If the amount of any assessments or surcharges collected
  337  from corporation policyholders, assessable insurers or their
  338  policyholders, or assessable insureds exceeds the amount of the
  339  deficits, such excess amounts shall be remitted to and retained
  340  by the corporation in a reserve to be used by the corporation,
  341  as determined by the board of governors and approved by the
  342  office, to pay claims or reduce any past, present, or future
  343  plan-year deficits or to reduce outstanding debt.
  344         4. The Citizens account, if established by the corporation
  345  pursuant to sub-subparagraph 2.b., is authorized to provide:
  346         a. Personal residential policies that provide
  347  comprehensive, multiperil coverage on risks that are not located
  348  in areas eligible for coverage by the Florida Windstorm
  349  Underwriting Association, as those areas were defined on January
  350  1, 2002, and for policies that do not provide coverage for the
  351  peril of wind on risks that are located in such areas;
  352         b. Commercial residential and commercial nonresidential
  353  policies that provide coverage for basic property perils on
  354  risks that are not located in areas eligible for coverage by the
  355  Florida Windstorm Underwriting Association, as those areas were
  356  defined on January 1, 2002, and for policies that do not provide
  357  coverage for the peril of wind on risks that are located in such
  358  areas; and
  359         c. Personal residential policies and commercial residential
  360  and commercial nonresidential property policies that provide
  361  coverage for the peril of wind on risks that are located in
  362  wind-eligible areas eligible for coverage by the Florida
  363  Windstorm Underwriting Association, as those areas were defined
  364  on January 1, 2002. The corporation may offer policies that
  365  provide multiperil coverage and shall offer policies that
  366  provide coverage only for the peril of wind for risks located in
  367  wind-eligible areas eligible for coverage by the Florida
  368  Windstorm Underwriting Association, as those areas were defined
  369  on January 1, 2002. The corporation may not offer new commercial
  370  residential policies providing multiperil coverage. The
  371  corporation, but shall continue to offer commercial residential
  372  wind-only policies, and may offer commercial residential
  373  policies excluding wind. However, the corporation may continue
  374  to renew a commercial residential multiperil policy on a
  375  building that was insured by the corporation on June 30, 2014,
  376  under a multiperil policy. In issuing multiperil coverage under
  377  this sub-subparagraph, the corporation may use its approved
  378  policy forms and rates for risks located in areas that are not
  379  wind-eligible eligible for coverage by the Florida Windstorm
  380  Underwriting Association as those areas were defined on January
  381  1, 2002, and for policies that do not provide coverage for the
  382  peril of wind on risks that are located in such areas. An
  383  applicant or insured who is eligible to purchase a multiperil
  384  policy from the corporation may purchase a multiperil policy
  385  from an authorized insurer without prejudice to the applicant’s
  386  or insured’s eligibility to prospectively purchase a policy that
  387  provides coverage only for the peril of wind from the
  388  corporation. An applicant or insured who is eligible for a
  389  corporation policy that provides coverage only for the peril of
  390  wind may elect to purchase or retain such policy and also
  391  purchase or retain coverage excluding wind from an authorized
  392  insurer without prejudice to the applicant’s or insured’s
  393  eligibility to prospectively purchase a policy that provides
  394  multiperil coverage from the corporation. The following
  395  policies, which provide coverage only for the peril of wind,
  396  must also include quota share primary insurance under
  397  subparagraph (c)2.: Personal residential policies and commercial
  398  residential and commercial nonresidential property policies that
  399  provide coverage for the peril of wind on risks that are located
  400  in areas eligible for coverage by the Florida Windstorm
  401  Underwriting Association, as those areas were defined on January
  402  1, 2002; policies that provide multiperil coverage, if offered
  403  by the corporation, and policies that provide coverage only for
  404  the peril of wind for risks located in areas eligible for
  405  coverage by the Florida Windstorm Underwriting Association, as
  406  those areas were defined on January 1, 2002; commercial
  407  residential wind-only policies; commercial residential policies
  408  excluding wind, if offered by the corporation; and commercial
  409  residential multiperil policies on a building that was insured
  410  by the corporation on June 30, 2014. The area eligible for
  411  coverage with the corporation under this sub-subparagraph
  412  includes the area within Port Canaveral, which is bordered on
  413  the south by the City of Cape Canaveral, bordered on the west by
  414  the Banana River, and bordered on the north by Federal
  415  Government property.
  416         5. With respect to a deficit in the Citizens account:
  417         a. Upon a determination by the board of governors that the
  418  Citizens account has a projected deficit, the board shall levy a
  419  Citizens policyholder surcharge against all policyholders of the
  420  corporation.
  421         (I) The surcharge shall be levied as a uniform percentage
  422  of the premium for the policy of up to 15 percent of such
  423  premium, which funds shall be used to offset the deficit.
  424         (II) The surcharge is payable upon cancellation or
  425  termination of the policy, upon renewal of the policy, or upon
  426  issuance of a new policy by the corporation within the first 12
  427  months after the date of the levy or the period of time
  428  necessary to fully collect the surcharge amount.
  429         (III) The surcharge is not considered premium and is not
  430  subject to commissions, fees, or premium taxes. However, failure
  431  to pay the surcharge shall be treated as failure to pay premium.
  432         b. After accounting for the Citizens policyholder surcharge
  433  imposed under sub-subparagraph a., the remaining projected
  434  deficit incurred in the Citizens account in a particular
  435  calendar year shall be recovered through emergency assessments
  436  under sub-subparagraph c.
  437         c. Upon a determination by the board of governors that a
  438  projected deficit in the Citizens account exceeds the amount
  439  that is expected to be recovered through surcharges under sub
  440  subparagraph a., the board, after verification by the office,
  441  shall levy emergency assessments for as many years as necessary
  442  to cover the deficits, to be collected by assessable insurers
  443  and the corporation and collected from assessable insureds upon
  444  issuance or renewal of policies for subject lines of business,
  445  excluding National Flood Insurance Program policies. The amount
  446  collected in a particular year must be a uniform percentage of
  447  that year’s direct written premium for subject lines of business
  448  and the Citizens account, National Flood Insurance Program
  449  policy premiums, as annually determined by the board and
  450  verified by the office. The office shall verify the arithmetic
  451  calculations involved in the board’s determination within 30
  452  days after receipt of the information on which the determination
  453  was based. The office shall notify assessable insurers and the
  454  Florida Surplus Lines Service Office of the date on which
  455  assessable insurers shall begin to collect and assessable
  456  insureds shall begin to pay such assessment. The date must be at
  457  least 90 days after the date the corporation levies emergency
  458  assessments pursuant to this sub-subparagraph. Notwithstanding
  459  any other law, the corporation and each assessable insurer that
  460  writes subject lines of business shall collect emergency
  461  assessments from its policyholders without such obligation being
  462  affected by any credit, limitation, exemption, or deferment.
  463  Emergency assessments levied by the corporation on assessable
  464  insureds shall be collected by the surplus lines agent at the
  465  time the surplus lines agent collects the surplus lines tax
  466  required by s. 626.932 and paid to the Florida Surplus Lines
  467  Service Office at the time the surplus lines agent pays the
  468  surplus lines tax to that office. The emergency assessments
  469  collected shall be transferred directly to the corporation on a
  470  periodic basis as determined by the corporation and held by the
  471  corporation solely in the Citizens account. The aggregate amount
  472  of emergency assessments levied for the Citizens account in any
  473  calendar year may be less than, but may not exceed the greater
  474  of, 10 percent of the amount needed to cover the deficit, plus
  475  interest, fees, commissions, required reserves, and other costs
  476  associated with financing the original deficit or 10 percent of
  477  the aggregate statewide direct written premium for subject lines
  478  of business and the Citizens accounts for the prior year, plus
  479  interest, fees, commissions, required reserves, and other costs
  480  associated with financing the deficit.
  481         d. The corporation may pledge the proceeds of assessments,
  482  projected recoveries from the Florida Hurricane Catastrophe
  483  Fund, other insurance and reinsurance recoverables, policyholder
  484  surcharges and other surcharges, and other funds available to
  485  the corporation as the source of revenue for and to secure bonds
  486  issued under paragraph (q), bonds or other indebtedness issued
  487  under subparagraph (c)3., or lines of credit or other financing
  488  mechanisms issued or created under this subsection; or to retire
  489  any other debt incurred as a result of deficits or events giving
  490  rise to deficits, or in any other way that the board determines
  491  will efficiently recover such deficits. The purpose of the lines
  492  of credit or other financing mechanisms is to provide additional
  493  resources to assist the corporation in covering claims and
  494  expenses attributable to a catastrophe. As used in this
  495  subsection, the term “assessments” includes emergency
  496  assessments under sub-subparagraph c. Emergency assessments
  497  collected under sub-subparagraph c. are not part of an insurer’s
  498  rates, are not premium, and are not subject to premium tax,
  499  fees, or commissions; however, failure to pay the emergency
  500  assessment shall be treated as failure to pay premium. The
  501  emergency assessments shall continue as long as any bonds issued
  502  or other indebtedness incurred with respect to a deficit for
  503  which the assessment was imposed remain outstanding, unless
  504  adequate provision has been made for the payment of such bonds
  505  or other indebtedness pursuant to the documents governing such
  506  bonds or indebtedness.
  507         e. As used in this subsection and for purposes of any
  508  deficit incurred on or after January 25, 2007, the term “subject
  509  lines of business” means insurance written by assessable
  510  insurers or procured by assessable insureds for all property and
  511  casualty lines of business in this state, but not including
  512  workers’ compensation or medical malpractice. As used in this
  513  sub-subparagraph, the term “property and casualty lines of
  514  business” includes all lines of business identified on Form 2,
  515  Exhibit of Premiums and Losses, in the annual statement required
  516  of authorized insurers under s. 624.424 and any rule adopted
  517  under this section, except for those lines identified as
  518  accident and health insurance and except for policies written
  519  under the National Flood Insurance Program or the Federal Crop
  520  Insurance Program. For purposes of this sub-subparagraph, the
  521  term “workers’ compensation” includes both workers’ compensation
  522  insurance and excess workers’ compensation insurance.
  523         f. The Florida Surplus Lines Service Office shall annually
  524  determine the aggregate statewide written premium in subject
  525  lines of business procured by assessable insureds and report
  526  that information to the corporation in a form and at a time the
  527  corporation specifies to ensure that the corporation can meet
  528  the requirements of this subsection and the corporation’s
  529  financing obligations.
  530         g. The Florida Surplus Lines Service Office shall verify
  531  the proper application by surplus lines agents of assessment
  532  percentages for emergency assessments levied under this
  533  subparagraph on assessable insureds and assist the corporation
  534  in ensuring the accurate, timely collection and payment of
  535  assessments by surplus lines agents as required by the
  536  corporation.
  537         h. If the amount of any assessments or surcharges collected
  538  from corporation policyholders, assessable insurers or their
  539  policyholders, or assessable insureds exceeds the amount of the
  540  deficits, such excess amounts shall be remitted to and retained
  541  by the corporation in a reserve to be used by the corporation,
  542  as determined by the board of governors and approved by the
  543  office, to pay claims or reduce any past, present, or future
  544  plan-year deficits or to reduce outstanding debt.
  545         (7)DEVELOPMENT AND MODIFICATION OF WIND-ELIGIBLE AREAS.—
  546         (a)The corporation may amend the wind-eligible areas,
  547  subject to approval by the Legislature under paragraph (c), by
  548  developing new eligibility criteria and rates for policies that
  549  provide wind-only coverage. In developing new eligibility
  550  criteria and rates, the corporation may consider the market for
  551  wind-only coverage in the areas in which wind-only coverage is
  552  to be offered, the resulting impact to the corporation’s overall
  553  exposure of offering such coverage in those areas, as well as
  554  reasonably prudent measures for limiting its exposure upon
  555  offering wind-only coverage in those areas.
  556         (b)Rates for coverage offered in wind-eligible areas are
  557  subject to paragraph (6)(n).
  558         (c)By December 1 of each year, beginning in 2025, the
  559  corporation shall submit to the Legislature the eligibility
  560  criteria and rates developed under paragraph (a) for review and
  561  approval. The office shall implement the eligibility criteria
  562  and rates only upon approval by the Legislature.
  563         (8)(7)WIND-ELIGIBLE AREA DEFINED; COLLATERAL PROTECTION
  564  INSURANCE.—
  565         (a)Except as otherwise provided in subsection (7), the
  566  term “wind-eligible area,” as used in this section, means an
  567  area that is eligible for coverage by the Florida Windstorm
  568  Underwriting Association, as those areas were defined on January
  569  1, 2002.
  570         (b) As used in this section and ss. 215.555 and 627.311,
  571  the term “collateral protection insurance” means commercial
  572  property insurance of which a creditor is the primary
  573  beneficiary and policyholder and which protects or covers an
  574  interest of the creditor arising out of a credit transaction
  575  secured by real or personal property. Initiation of such
  576  coverage is triggered by the mortgagor’s failure to maintain
  577  insurance coverage as required by the mortgage or other lending
  578  document. Collateral protection insurance is not residential
  579  coverage.
  580         Section 2. This act shall take effect July 1, 2024.

feedback