Bill Text: FL S1630 | 2016 | Regular Session | Comm Sub
Bill Title: Operations of the Citizens Property Insurance Corporation
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2016-03-08 - Laid on Table, companion bill(s) passed, see CS/CS/HB 931 (Ch. 2016-229) [S1630 Detail]
Download: Florida-2016-S1630-Comm_Sub.html
Florida Senate - 2016 CS for CS for SB 1630 By the Committees on Ethics and Elections; and Banking and Insurance; and Senator Flores 582-03674-16 20161630c2 1 A bill to be entitled 2 An act relating to operations of the Citizens Property 3 Insurance Corporation; amending s. 627.351, F.S.; 4 specifying that a consumer representative appointed by 5 the Governor to the Citizens Property Insurance 6 Corporation’s board of governors is not prohibited 7 from practicing in a certain profession if required or 8 permitted by law or ordinance; revising the 9 requirements for licensed agents of the corporation; 10 revising provisions related to the corporation’s use 11 of certain public and private hurricane loss 12 projection models in establishing certain rates; 13 revising a provision to permit specified information 14 from certain underwriting and claims files to be made 15 available to certain entities; providing limitations 16 for the use of such information by the entities; 17 requiring the take-out program to be revised for 18 specified purposes by a specified date; requiring the 19 corporation to schedule up to a certain number of 20 cycles annually during which insurers may identify and 21 submit policy take-out requests; specifying 22 information required to be included in such requests; 23 providing conditions that must be agreed to by 24 insurers submitting a request; requiring the 25 corporation to maintain and make available specified 26 lists of insurers to its agents of record; requiring 27 the corporation to provide policyholders and the 28 agents of record with a specified notice regarding 29 their policy renewal options; amending s. 627.3518, 30 F.S.; revising criteria for when an applicant for 31 coverage from the corporation shall be considered a 32 renewal; providing an effective date. 33 34 Be It Enacted by the Legislature of the State of Florida: 35 36 Section 1. Paragraphs (c), (n), and (x) of subsection (6) 37 of section 627.351, Florida Statutes, are amended, and paragraph 38 (ii) is added to that subsection, to read: 39 627.351 Insurance risk apportionment plans.— 40 (6) CITIZENS PROPERTY INSURANCE CORPORATION.— 41 (c) The corporation’s plan of operation: 42 1. Must provide for adoption of residential property and 43 casualty insurance policy forms and commercial residential and 44 nonresidential property insurance forms, which must be approved 45 by the office before use. The corporation shall adopt the 46 following policy forms: 47 a. Standard personal lines policy forms that are 48 comprehensive multiperil policies providing full coverage of a 49 residential property equivalent to the coverage provided in the 50 private insurance market under an HO-3, HO-4, or HO-6 policy. 51 b. Basic personal lines policy forms that are policies 52 similar to an HO-8 policy or a dwelling fire policy that provide 53 coverage meeting the requirements of the secondary mortgage 54 market, but which is more limited than the coverage under a 55 standard policy. 56 c. Commercial lines residential and nonresidential policy 57 forms that are generally similar to the basic perils of full 58 coverage obtainable for commercial residential structures and 59 commercial nonresidential structures in the admitted voluntary 60 market. 61 d. Personal lines and commercial lines residential property 62 insurance forms that cover the peril of wind only. The forms are 63 applicable only to residential properties located in areas 64 eligible for coverage under the coastal account referred to in 65 sub-subparagraph (b)2.a. 66 e. Commercial lines nonresidential property insurance forms 67 that cover the peril of wind only. The forms are applicable only 68 to nonresidential properties located in areas eligible for 69 coverage under the coastal account referred to in sub 70 subparagraph (b)2.a. 71 f. The corporation may adopt variations of the policy forms 72 listed in sub-subparagraphs a.-e. which contain more restrictive 73 coverage. 74 g. Effective January 1, 2013, the corporation shall offer a 75 basic personal lines policy similar to an HO-8 policy with 76 dwelling repair based on common construction materials and 77 methods. 78 2. Must provide that the corporation adopt a program in 79 which the corporation and authorized insurers enter into quota 80 share primary insurance agreements for hurricane coverage, as 81 defined in s. 627.4025(2)(a), for eligible risks, and adopt 82 property insurance forms for eligible risks which cover the 83 peril of wind only. 84 a. As used in this subsection, the term: 85 (I) “Quota share primary insurance” means an arrangement in 86 which the primary hurricane coverage of an eligible risk is 87 provided in specified percentages by the corporation and an 88 authorized insurer. The corporation and authorized insurer are 89 each solely responsible for a specified percentage of hurricane 90 coverage of an eligible risk as set forth in a quota share 91 primary insurance agreement between the corporation and an 92 authorized insurer and the insurance contract. The 93 responsibility of the corporation or authorized insurer to pay 94 its specified percentage of hurricane losses of an eligible 95 risk, as set forth in the agreement, may not be altered by the 96 inability of the other party to pay its specified percentage of 97 losses. Eligible risks that are provided hurricane coverage 98 through a quota share primary insurance arrangement must be 99 provided policy forms that set forth the obligations of the 100 corporation and authorized insurer under the arrangement, 101 clearly specify the percentages of quota share primary insurance 102 provided by the corporation and authorized insurer, and 103 conspicuously and clearly state that the authorized insurer and 104 the corporation may not be held responsible beyond their 105 specified percentage of coverage of hurricane losses. 106 (II) “Eligible risks” means personal lines residential and 107 commercial lines residential risks that meet the underwriting 108 criteria of the corporation and are located in areas that were 109 eligible for coverage by the Florida Windstorm Underwriting 110 Association on January 1, 2002. 111 b. The corporation may enter into quota share primary 112 insurance agreements with authorized insurers at corporation 113 coverage levels of 90 percent and 50 percent. 114 c. If the corporation determines that additional coverage 115 levels are necessary to maximize participation in quota share 116 primary insurance agreements by authorized insurers, the 117 corporation may establish additional coverage levels. However, 118 the corporation’s quota share primary insurance coverage level 119 may not exceed 90 percent. 120 d. Any quota share primary insurance agreement entered into 121 between an authorized insurer and the corporation must provide 122 for a uniform specified percentage of coverage of hurricane 123 losses, by county or territory as set forth by the corporation 124 board, for all eligible risks of the authorized insurer covered 125 under the agreement. 126 e. Any quota share primary insurance agreement entered into 127 between an authorized insurer and the corporation is subject to 128 review and approval by the office. However, such agreement shall 129 be authorized only as to insurance contracts entered into 130 between an authorized insurer and an insured who is already 131 insured by the corporation for wind coverage. 132 f. For all eligible risks covered under quota share primary 133 insurance agreements, the exposure and coverage levels for both 134 the corporation and authorized insurers shall be reported by the 135 corporation to the Florida Hurricane Catastrophe Fund. For all 136 policies of eligible risks covered under such agreements, the 137 corporation and the authorized insurer must maintain complete 138 and accurate records for the purpose of exposure and loss 139 reimbursement audits as required by fund rules. The corporation 140 and the authorized insurer shall each maintain duplicate copies 141 of policy declaration pages and supporting claims documents. 142 g. The corporation board shall establish in its plan of 143 operation standards for quota share agreements which ensure that 144 there is no discriminatory application among insurers as to the 145 terms of the agreements, pricing of the agreements, incentive 146 provisions if any, and consideration paid for servicing policies 147 or adjusting claims. 148 h. The quota share primary insurance agreement between the 149 corporation and an authorized insurer must set forth the 150 specific terms under which coverage is provided, including, but 151 not limited to, the sale and servicing of policies issued under 152 the agreement by the insurance agent of the authorized insurer 153 producing the business, the reporting of information concerning 154 eligible risks, the payment of premium to the corporation, and 155 arrangements for the adjustment and payment of hurricane claims 156 incurred on eligible risks by the claims adjuster and personnel 157 of the authorized insurer. Entering into a quota sharing 158 insurance agreement between the corporation and an authorized 159 insurer is voluntary and at the discretion of the authorized 160 insurer. 161 3. May provide that the corporation may employ or otherwise 162 contract with individuals or other entities to provide 163 administrative or professional services that may be appropriate 164 to effectuate the plan. The corporation may borrow funds by 165 issuing bonds or by incurring other indebtedness, and shall have 166 other powers reasonably necessary to effectuate the requirements 167 of this subsection, including, without limitation, the power to 168 issue bonds and incur other indebtedness in order to refinance 169 outstanding bonds or other indebtedness. The corporation may 170 seek judicial validation of its bonds or other indebtedness 171 under chapter 75. The corporation may issue bonds or incur other 172 indebtedness, or have bonds issued on its behalf by a unit of 173 local government pursuant to subparagraph (q)2. in the absence 174 of a hurricane or other weather-related event, upon a 175 determination by the corporation, subject to approval by the 176 office, that such action would enable it to efficiently meet the 177 financial obligations of the corporation and that such 178 financings are reasonably necessary to effectuate the 179 requirements of this subsection. The corporation may take all 180 actions needed to facilitate tax-free status for such bonds or 181 indebtedness, including formation of trusts or other affiliated 182 entities. The corporation may pledge assessments, projected 183 recoveries from the Florida Hurricane Catastrophe Fund, other 184 reinsurance recoverables, policyholder surcharges and other 185 surcharges, and other funds available to the corporation as 186 security for bonds or other indebtedness. In recognition of s. 187 10, Art. I of the State Constitution, prohibiting the impairment 188 of obligations of contracts, it is the intent of the Legislature 189 that no action be taken whose purpose is to impair any bond 190 indenture or financing agreement or any revenue source committed 191 by contract to such bond or other indebtedness. 192 4. Must require that the corporation operate subject to the 193 supervision and approval of a board of governors consisting of 194 nine individuals who are residents of this state and who are 195 from different geographical areas of the state, one of whom is 196 appointed by the Governor and serves solely to advocate on 197 behalf of the consumer. The appointment of a consumer 198 representative by the Governor is deemed to be within the scope 199 of the exemption provided in s. 112.313(7)(b) and is in addition 200 to the appointments authorized under sub-subparagraph a. 201 a. The Governor, the Chief Financial Officer, the President 202 of the Senate, and the Speaker of the House of Representatives 203 shall each appoint two members of the board. At least one of the 204 two members appointed by each appointing officer must have 205 demonstrated expertise in insurance and be deemed to be within 206 the scope of the exemption provided in s. 112.313(7)(b). The 207 Chief Financial Officer shall designate one of the appointees as 208 chair. All board members serve at the pleasure of the appointing 209 officer. All members of the board are subject to removal at will 210 by the officers who appointed them. All board members, including 211 the chair, must be appointed to serve for 3-year terms beginning 212 annually on a date designated by the plan. However, for the 213 first term beginning on or after July 1, 2009, each appointing 214 officer shall appoint one member of the board for a 2-year term 215 and one member for a 3-year term. A board vacancy shall be 216 filled for the unexpired term by the appointing officer. The 217 Chief Financial Officer shall appoint a technical advisory group 218 to provide information and advice to the board in connection 219 with the board’s duties under this subsection. The executive 220 director and senior managers of the corporation shall be engaged 221 by the board and serve at the pleasure of the board. Any 222 executive director appointed on or after July 1, 2006, is 223 subject to confirmation by the Senate. The executive director is 224 responsible for employing other staff as the corporation may 225 require, subject to review and concurrence by the board. 226 b. The board shall create a Market Accountability Advisory 227 Committee to assist the corporation in developing awareness of 228 its rates and its customer and agent service levels in 229 relationship to the voluntary market insurers writing similar 230 coverage. 231 (I) The members of the advisory committee consist of the 232 following 11 persons, one of whom must be elected chair by the 233 members of the committee: four representatives, one appointed by 234 the Florida Association of Insurance Agents, one by the Florida 235 Association of Insurance and Financial Advisors, one by the 236 Professional Insurance Agents of Florida, and one by the Latin 237 American Association of Insurance Agencies; three 238 representatives appointed by the insurers with the three highest 239 voluntary market share of residential property insurance 240 business in the state; one representative from the Office of 241 Insurance Regulation; one consumer appointed by the board who is 242 insured by the corporation at the time of appointment to the 243 committee; one representative appointed by the Florida 244 Association of Realtors; and one representative appointed by the 245 Florida Bankers Association. All members shall be appointed to 246 3-year terms and may serve for consecutive terms. 247 (II) The committee shall report to the corporation at each 248 board meeting on insurance market issues which may include rates 249 and rate competition with the voluntary market; service, 250 including policy issuance, claims processing, and general 251 responsiveness to policyholders, applicants, and agents; and 252 matters relating to depopulation. 253 5. Must provide a procedure for determining the eligibility 254 of a risk for coverage, as follows: 255 a. Subject to s. 627.3517, with respect to personal lines 256 residential risks, if the risk is offered coverage from an 257 authorized insurer at the insurer’s approved rate under a 258 standard policy including wind coverage or, if consistent with 259 the insurer’s underwriting rules as filed with the office, a 260 basic policy including wind coverage, for a new application to 261 the corporation for coverage, the risk is not eligible for any 262 policy issued by the corporation unless the premium for coverage 263 from the authorized insurer is more than 15 percent greater than 264 the premium for comparable coverage from the corporation. 265 Whenever an offer of coverage for a personal lines residential 266 risk is received for a policyholder of the corporation at 267 renewal from an authorized insurer, if the offer is equal to or 268 less than the corporation’s renewal premium for comparable 269 coverage, the risk is not eligible for coverage with the 270 corporation. If the risk is not able to obtain such offer, the 271 risk is eligible for a standard policy including wind coverage 272 or a basic policy including wind coverage issued by the 273 corporation; however, if the risk could not be insured under a 274 standard policy including wind coverage regardless of market 275 conditions, the risk is eligible for a basic policy including 276 wind coverage unless rejected under subparagraph 8. However, a 277 policyholder removed from the corporation through an assumption 278 agreement remains eligible for coverage from the corporation 279 until the end of the assumption period. The corporation shall 280 determine the type of policy to be provided on the basis of 281 objective standards specified in the underwriting manual and 282 based on generally accepted underwriting practices. 283 (I) If the risk accepts an offer of coverage through the 284 market assistance plan or through a mechanism established by the 285 corporation other than a plan established by s. 627.3518, before 286 a policy is issued to the risk by the corporation or during the 287 first 30 days of coverage by the corporation, and the producing 288 agent who submitted the application to the plan or to the 289 corporation is not currently appointed by the insurer, the 290 insurer shall: 291 (A) Pay to the producing agent of record of the policy for 292 the first year, an amount that is the greater of the insurer’s 293 usual and customary commission for the type of policy written or 294 a fee equal to the usual and customary commission of the 295 corporation; or 296 (B) Offer to allow the producing agent of record of the 297 policy to continue servicing the policy for at least 1 year and 298 offer to pay the agent the greater of the insurer’s or the 299 corporation’s usual and customary commission for the type of 300 policy written. 301 302 If the producing agent is unwilling or unable to accept 303 appointment, the new insurer shall pay the agent in accordance 304 with sub-sub-sub-subparagraph (A). 305 (II) If the corporation enters into a contractual agreement 306 for a take-out plan, the producing agent of record of the 307 corporation policy is entitled to retain any unearned commission 308 on the policy, and the insurer shall: 309 (A) Pay to the producing agent of record, for the first 310 year, an amount that is the greater of the insurer’s usual and 311 customary commission for the type of policy written or a fee 312 equal to the usual and customary commission of the corporation; 313 or 314 (B) Offer to allow the producing agent of record to 315 continue servicing the policy for at least 1 year and offer to 316 pay the agent the greater of the insurer’s or the corporation’s 317 usual and customary commission for the type of policy written. 318 319 If the producing agent is unwilling or unable to accept 320 appointment, the new insurer shall pay the agent in accordance 321 with sub-sub-sub-subparagraph (A). 322 b. With respect to commercial lines residential risks, for 323 a new application to the corporation for coverage, if the risk 324 is offered coverage under a policy including wind coverage from 325 an authorized insurer at its approved rate, the risk is not 326 eligible for a policy issued by the corporation unless the 327 premium for coverage from the authorized insurer is more than 15 328 percent greater than the premium for comparable coverage from 329 the corporation. Whenever an offer of coverage for a commercial 330 lines residential risk is received for a policyholder of the 331 corporation at renewal from an authorized insurer, if the offer 332 is equal to or less than the corporation’s renewal premium for 333 comparable coverage, the risk is not eligible for coverage with 334 the corporation. If the risk is not able to obtain any such 335 offer, the risk is eligible for a policy including wind coverage 336 issued by the corporation. However, a policyholder removed from 337 the corporation through an assumption agreement remains eligible 338 for coverage from the corporation until the end of the 339 assumption period. 340 (I) If the risk accepts an offer of coverage through the 341 market assistance plan or through a mechanism established by the 342 corporation other than a plan established by s. 627.3518, before 343 a policy is issued to the risk by the corporation or during the 344 first 30 days of coverage by the corporation, and the producing 345 agent who submitted the application to the plan or the 346 corporation is not currently appointed by the insurer, the 347 insurer shall: 348 (A) Pay to the producing agent of record of the policy, for 349 the first year, an amount that is the greater of the insurer’s 350 usual and customary commission for the type of policy written or 351 a fee equal to the usual and customary commission of the 352 corporation; or 353 (B) Offer to allow the producing agent of record of the 354 policy to continue servicing the policy for at least 1 year and 355 offer to pay the agent the greater of the insurer’s or the 356 corporation’s usual and customary commission for the type of 357 policy written. 358 359 If the producing agent is unwilling or unable to accept 360 appointment, the new insurer shall pay the agent in accordance 361 with sub-sub-sub-subparagraph (A). 362 (II) If the corporation enters into a contractual agreement 363 for a take-out plan, the producing agent of record of the 364 corporation policy is entitled to retain any unearned commission 365 on the policy, and the insurer shall: 366 (A) Pay to the producing agent of record, for the first 367 year, an amount that is the greater of the insurer’s usual and 368 customary commission for the type of policy written or a fee 369 equal to the usual and customary commission of the corporation; 370 or 371 (B) Offer to allow the producing agent of record to 372 continue servicing the policy for at least 1 year and offer to 373 pay the agent the greater of the insurer’s or the corporation’s 374 usual and customary commission for the type of policy written. 375 376 If the producing agent is unwilling or unable to accept 377 appointment, the new insurer shall pay the agent in accordance 378 with sub-sub-sub-subparagraph (A). 379 c. For purposes of determining comparable coverage under 380 sub-subparagraphs a. and b., the comparison must be based on 381 those forms and coverages that are reasonably comparable. The 382 corporation may rely on a determination of comparable coverage 383 and premium made by the producing agent who submits the 384 application to the corporation, made in the agent’s capacity as 385 the corporation’s agent. A comparison may be made solely of the 386 premium with respect to the main building or structure only on 387 the following basis: the same coverage A or other building 388 limits; the same percentage hurricane deductible that applies on 389 an annual basis or that applies to each hurricane for commercial 390 residential property; the same percentage of ordinance and law 391 coverage, if the same limit is offered by both the corporation 392 and the authorized insurer; the same mitigation credits, to the 393 extent the same types of credits are offered both by the 394 corporation and the authorized insurer; the same method for loss 395 payment, such as replacement cost or actual cash value, if the 396 same method is offered both by the corporation and the 397 authorized insurer in accordance with underwriting rules; and 398 any other form or coverage that is reasonably comparable as 399 determined by the board. If an application is submitted to the 400 corporation for wind-only coverage in the coastal account, the 401 premium for the corporation’s wind-only policy plus the premium 402 for the ex-wind policy that is offered by an authorized insurer 403 to the applicant must be compared to the premium for multiperil 404 coverage offered by an authorized insurer, subject to the 405 standards for comparison specified in this subparagraph. If the 406 corporation or the applicant requests from the authorized 407 insurer a breakdown of the premium of the offer by types of 408 coverage so that a comparison may be made by the corporation or 409 its agent and the authorized insurer refuses or is unable to 410 provide such information, the corporation may treat the offer as 411 not being an offer of coverage from an authorized insurer at the 412 insurer’s approved rate. 413 6. Must include rules for classifications of risks and 414 rates. 415 7. Must provide that if premium and investment income for 416 an account attributable to a particular calendar year are in 417 excess of projected losses and expenses for the account 418 attributable to that year, such excess shall be held in surplus 419 in the account. Such surplus must be available to defray 420 deficits in that account as to future years and used for that 421 purpose before assessing assessable insurers and assessable 422 insureds as to any calendar year. 423 8. Must provide objective criteria and procedures to be 424 uniformly applied to all applicants in determining whether an 425 individual risk is so hazardous as to be uninsurable. In making 426 this determination and in establishing the criteria and 427 procedures, the following must be considered: 428 a. Whether the likelihood of a loss for the individual risk 429 is substantially higher than for other risks of the same class; 430 and 431 b. Whether the uncertainty associated with the individual 432 risk is such that an appropriate premium cannot be determined. 433 434 The acceptance or rejection of a risk by the corporation shall 435 be construed as the private placement of insurance, and the 436 provisions of chapter 120 do not apply. 437 9. Must provide that the corporation make its best efforts 438 to procure catastrophe reinsurance at reasonable rates, to cover 439 its projected 100-year probable maximum loss as determined by 440 the board of governors. 441 10. The policies issued by the corporation must provide 442 that if the corporation or the market assistance plan obtains an 443 offer from an authorized insurer to cover the risk at its 444 approved rates, the risk is no longer eligible for renewal 445 through the corporation, except as otherwise provided in this 446 subsection. 447 11. Corporation policies and applications must include a 448 notice that the corporation policy could, under this section, be 449 replaced with a policy issued by an authorized insurer which 450 does not provide coverage identical to the coverage provided by 451 the corporation. The notice must also specify that acceptance of 452 corporation coverage creates a conclusive presumption that the 453 applicant or policyholder is aware of this potential. 454 12. May establish, subject to approval by the office, 455 different eligibility requirements and operational procedures 456 for any line or type of coverage for any specified county or 457 area if the board determines that such changes are justified due 458 to the voluntary market being sufficiently stable and 459 competitive in such area or for such line or type of coverage 460 and that consumers who, in good faith, are unable to obtain 461 insurance through the voluntary market through ordinary methods 462 continue to have access to coverage from the corporation. If 463 coverage is sought in connection with a real property transfer, 464 the requirements and procedures may not provide an effective 465 date of coverage later than the date of the closing of the 466 transfer as established by the transferor, the transferee, and, 467 if applicable, the lender. 468 13. Must provide that, with respect to the coastal account, 469 any assessable insurer with a surplus as to policyholders of $25 470 million or less writing 25 percent or more of its total 471 countrywide property insurance premiums in this state may 472 petition the office, within the first 90 days of each calendar 473 year, to qualify as a limited apportionment company. A regular 474 assessment levied by the corporation on a limited apportionment 475 company for a deficit incurred by the corporation for the 476 coastal account may be paid to the corporation on a monthly 477 basis as the assessments are collected by the limited 478 apportionment company from its insureds, but a limited 479 apportionment company must begin collecting the regular 480 assessments not later than 90 days after the regular assessments 481 are levied by the corporation, and the regular assessments must 482 be paid in full within 15 months after being levied by the 483 corporation. A limited apportionment company shall collect from 484 its policyholders any emergency assessment imposed under sub 485 subparagraph (b)3.d. The plan must provide that, if the office 486 determines that any regular assessment will result in an 487 impairment of the surplus of a limited apportionment company, 488 the office may direct that all or part of such assessment be 489 deferred as provided in subparagraph (q)4. However, an emergency 490 assessment to be collected from policyholders under sub 491 subparagraph (b)3.d. may not be limited or deferred. 492 14. Must provide that the corporation appoint as its 493 licensed agents only those agents who throughout such 494 appointments also hold an appointment as defined in s. 495 626.015(3) bywithan insurer whoat the time of the agent’s496initial appointment by the corporationis authorized to write 497 and is actually writing or renewing personal lines residential 498 property coverage, commercial residential property coverage, or 499 commercial nonresidential property coverage within the state. 500 15. Must provide a premium payment plan option to its 501 policyholders which, at a minimum, allows for quarterly and 502 semiannual payment of premiums. A monthly payment plan may, but 503 is not required to, be offered. 504 16. Must limit coverage on mobile homes or manufactured 505 homes built before 1994 to actual cash value of the dwelling 506 rather than replacement costs of the dwelling. 507 17. Must provide coverage for manufactured or mobile home 508 dwellings. Such coverage must also include the following 509 attached structures: 510 a. Screened enclosures that are aluminum framed or screened 511 enclosures that are not covered by the same or substantially the 512 same materials as those of the primary dwelling; 513 b. Carports that are aluminum or carports that are not 514 covered by the same or substantially the same materials as those 515 of the primary dwelling; and 516 c. Patios that have a roof covering that is constructed of 517 materials that are not the same or substantially the same 518 materials as those of the primary dwelling. 519 520 The corporation shall make available a policy for mobile homes 521 or manufactured homes for a minimum insured value of at least 522 $3,000. 523 18. May provide such limits of coverage as the board 524 determines, consistent with the requirements of this subsection. 525 19. May require commercial property to meet specified 526 hurricane mitigation construction features as a condition of 527 eligibility for coverage. 528 20. Must provide that new or renewal policies issued by the 529 corporation on or after January 1, 2012, which cover sinkhole 530 loss do not include coverage for any loss to appurtenant 531 structures, driveways, sidewalks, decks, or patios that are 532 directly or indirectly caused by sinkhole activity. The 533 corporation shall exclude such coverage using a notice of 534 coverage change, which may be included with the policy renewal, 535 and not by issuance of a notice of nonrenewal of the excluded 536 coverage upon renewal of the current policy. 537 21. As of January 1, 2012, must require that the agent 538 obtain from an applicant for coverage from the corporation an 539 acknowledgment signed by the applicant, which includes, at a 540 minimum, the following statement: 541 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE 542 AND ASSESSMENT LIABILITY: 543 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE 544 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A 545 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON, 546 MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND 547 PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE 548 POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT 549 OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA 550 LEGISLATURE. 551 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER 552 SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM, 553 BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO 554 BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN 555 PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE 556 WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES 557 ARE REGULATED AND APPROVED BY THE STATE. 558 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY 559 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER 560 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE 561 FLORIDA LEGISLATURE. 562 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE 563 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE 564 STATE OF FLORIDA. 565 a. The corporation shall maintain, in electronic format or 566 otherwise, a copy of the applicant’s signed acknowledgment and 567 provide a copy of the statement to the policyholder as part of 568 the first renewal after the effective date of this subparagraph. 569 b. The signed acknowledgment form creates a conclusive 570 presumption that the policyholder understood and accepted his or 571 her potential surcharge and assessment liability as a 572 policyholder of the corporation. 573 (n)1. Rates for coverage provided by the corporation must 574 be actuarially sound and subject to s. 627.062, except as 575 otherwise provided in this paragraph. The corporation shall file 576 its recommended rates with the office at least annually. The 577 corporation shall provide any additional information regarding 578 the rates which the office requires. The office shall consider 579 the recommendations of the board and issue a final order 580 establishing the rates for the corporation within 45 days after 581 the recommended rates are filed. The corporation may not pursue 582 an administrative challenge or judicial review of the final 583 order of the office. 584 2. In addition to the rates otherwise determined pursuant 585 to this paragraph, the corporation shall impose and collect an 586 amount equal to the premium tax provided in s. 624.509 to 587 augment the financial resources of the corporation. 588 3. After the public hurricane loss-projection model under 589 s. 627.06281 has been found to be accurate and reliable by the 590 Florida Commission on Hurricane Loss Projection Methodology, the 591 model shall be considered when establishingserve as the minimum592benchmarkfor determiningthe windstorm portion of the 593 corporation’s rates. The corporation may use the public model 594 results in combination with the results of private models to 595 calculate rates for the windstorm portion of the corporation’s 596 rates. This subparagraph does not require or allow the 597 corporation to adopt rates lower than the rates otherwise 598 required or allowed by this paragraph. 599 4. The rate filings for the corporation which were approved 600 by the office and took effect January 1, 2007, are rescinded, 601 except for those rates that were lowered. As soon as possible, 602 the corporation shall begin using the lower rates that were in 603 effect on December 31, 2006, and provide refunds to 604 policyholders who paid higher rates as a result of that rate 605 filing. The rates in effect on December 31, 2006, remain in 606 effect for the 2007 and 2008 calendar years except for any rate 607 change that results in a lower rate. The next rate change that 608 may increase rates shall take effect pursuant to a new rate 609 filing recommended by the corporation and established by the 610 office, subject to this paragraph. 611 5. Beginning on July 15, 2009, and annually thereafter, the 612 corporation must make a recommended actuarially sound rate 613 filing for each personal and commercial line of business it 614 writes, to be effective no earlier than January 1, 2010. 615 6. Beginning on or after January 1, 2010, and 616 notwithstanding the board’s recommended rates and the office’s 617 final order regarding the corporation’s filed rates under 618 subparagraph 1., the corporation shall annually implement a rate 619 increase which, except for sinkhole coverage, does not exceed 10 620 percent for any single policy issued by the corporation, 621 excluding coverage changes and surcharges. 622 7. The corporation may also implement an increase to 623 reflect the effect on the corporation of the cash buildup factor 624 pursuant to s. 215.555(5)(b). 625 8. The corporation’s implementation of rates as prescribed 626 in subparagraph 6. shall cease for any line of business written 627 by the corporation upon the corporation’s implementation of 628 actuarially sound rates. Thereafter, the corporation shall 629 annually make a recommended actuarially sound rate filing for 630 each commercial and personal line of business the corporation 631 writes. 632 (x)1. The following records of the corporation are 633 confidential and exempt from the provisions of s. 119.07(1) and 634 s. 24(a), Art. I of the State Constitution: 635 a. Underwriting files, except that a policyholder or an 636 applicant shall have access to his or her own underwriting 637 files. Confidential and exempt underwriting file records may 638 also be released to other governmental agencies upon written 639 request and demonstration of need; such records held by the 640 receiving agency remain confidential and exempt as provided 641 herein. 642 b. Claims files, until termination of all litigation and 643 settlement of all claims arising out of the same incident, 644 although portions of the claims files may remain exempt, as 645 otherwise provided by law. Confidential and exempt claims file 646 records may be released to other governmental agencies upon 647 written request and demonstration of need; such records held by 648 the receiving agency remain confidential and exempt as provided 649 herein. 650 c. Records obtained or generated by an internal auditor 651 pursuant to a routine audit, until the audit is completed, or if 652 the audit is conducted as part of an investigation, until the 653 investigation is closed or ceases to be active. An investigation 654 is considered “active” while the investigation is being 655 conducted with a reasonable, good faith belief that it could 656 lead to the filing of administrative, civil, or criminal 657 proceedings. 658 d. Matters reasonably encompassed in privileged attorney 659 client communications. 660 e. Proprietary information licensed to the corporation 661 under contract and the contract provides for the confidentiality 662 of such proprietary information. 663 f. All information relating to the medical condition or 664 medical status of a corporation employee which is not relevant 665 to the employee’s capacity to perform his or her duties, except 666 as otherwise provided in this paragraph. Information that is 667 exempt shall include, but is not limited to, information 668 relating to workers’ compensation, insurance benefits, and 669 retirement or disability benefits. 670 g. Upon an employee’s entrance into the employee assistance 671 program, a program to assist any employee who has a behavioral 672 or medical disorder, substance abuse problem, or emotional 673 difficulty thatwhichaffects the employee’s job performance, 674 all records relative to that participation shall be confidential 675 and exempt from the provisions of s. 119.07(1) and s. 24(a), 676 Art. I of the State Constitution, except as otherwise provided 677 in s. 112.0455(11). 678 h. Information relating to negotiations for financing, 679 reinsurance, depopulation, or contractual services, until the 680 conclusion of the negotiations. 681 i. Minutes of closed meetings regarding underwriting files, 682 and minutes of closed meetings regarding an open claims file 683 until termination of all litigation and settlement of all claims 684 with regard to that claim, except that information otherwise 685 confidential or exempt by law shall be redacted. 686 2. If an authorized insurer is considering underwriting a 687 risk insured by the corporation, relevant underwriting files and 688 confidential claims files may be released to the insurer 689 provided the insurer agrees in writing, notarized and under 690 oath, to maintain the confidentiality of such files. If a file 691 is transferred to an insurer, that file is no longer a public 692 record because it is not held by an agency subject to the 693 provisions of the public records law. Underwriting files and 694 confidential claims files may also be released to staff and the 695 board of governors of the market assistance plan established 696 pursuant to s. 627.3515, who must retain the confidentiality of 697 such files, except such files may be released to authorized 698 insurers that are considering assuming the risks to which the 699 files apply, provided the insurer agrees in writing, notarized 700 and under oath, to maintain the confidentiality of such files. 701 Finally, the corporation or the board or staff of the market 702 assistance plan may make the following information obtained from 703 underwriting files and confidential claims files available to an 704 entity that has obtained a permit to become an authorized 705 insurer, a reinsurer that may provide reinsurance under s. 706 624.610, a licensed reinsurance broker, a licensed rating 707 organization, a modeling company, or a licensed general lines 708 insurance agentagents: name, address, and telephone number of 709 the residential property owner or insured; location of the risk; 710 rating information; loss history; and policy type. The receiving 711 personlicensed general lines insurance agentmust retain the 712 confidentiality of the information received and may use the 713 information only for the purposes of developing a take-out plan 714 or a rating plan to be submitted to the office for approval or 715 otherwise analyzing the underwriting of a risk or risks insured 716 by the corporation on behalf of the private insurance market. A 717 licensed general lines insurance agent may not use such 718 information for the direct solicitation of policyholders. 719 3. A policyholder who has filed suit against the 720 corporation has the right to discover the contents of his or her 721 own claims file to the same extent that discovery of such 722 contents would be available from a private insurer in litigation 723 as provided by the Florida Rules of Civil Procedure, the Florida 724 Evidence Code, and other applicable law. Pursuant to subpoena, a 725 third party has the right to discover the contents of an 726 insured’s or applicant’s underwriting or claims file to the same 727 extent that discovery of such contents would be available from a 728 private insurer by subpoena as provided by the Florida Rules of 729 Civil Procedure, the Florida Evidence Code, and other applicable 730 law, and subject to any confidentiality protections requested by 731 the corporation and agreed to by the seeking party or ordered by 732 the court. The corporation may release confidential underwriting 733 and claims file contents and information as it deems necessary 734 and appropriate to underwrite or service insurance policies and 735 claims, subject to any confidentiality protections deemed 736 necessary and appropriate by the corporation. 737 4. Portions of meetings of the corporation are exempt from 738 the provisions of s. 286.011 and s. 24(b), Art. I of the State 739 Constitution wherein confidential underwriting files or 740 confidential open claims files are discussed. All portions of 741 corporation meetings which are closed to the public shall be 742 recorded by a court reporter. The court reporter shall record 743 the times of commencement and termination of the meeting, all 744 discussion and proceedings, the names of all persons present at 745 any time, and the names of all persons speaking. No portion of 746 any closed meeting shall be off the record. Subject to the 747 provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s 748 notes of any closed meeting shall be retained by the corporation 749 for a minimum of 5 years. A copy of the transcript, less any 750 exempt matters, of any closed meeting wherein claims are 751 discussed shall become public as to individual claims after 752 settlement of the claim. 753 (ii) The corporation shall revise the programs adopted 754 pursuant to sub-subparagraph (q)3.a. for personal lines 755 residential policies to maximize policyholder options and 756 encourage increased participation by insurers and agents. Such 757 revisions must comply with this paragraph no later than January 758 1, 2017. 759 1. The corporation must schedule no more than 6 cycles per 760 year during which insurers may identify policies they wish to 761 take out and may submit requests to take out such policies to 762 the corporation in a form and manner prescribed by the 763 corporation. An insurer’s take-out request must include a 764 description of the coverages offered and an estimated premium. 765 In submitting any take-out request, an insurer must agree to 766 offer comparable coverage to that offered by the corporation and 767 that the initial premium of the insurer after assumption will 768 not exceed its estimated premium by more than 10 percent, 769 excluding coverage changes, surcharges, and assessments. 770 2. For each policy of the corporation identified under 771 subparagraph 1., the corporation shall maintain and make 772 available to the agent of record a consolidated list of all 773 insurers requesting the policy. The list must contain the 774 information described in subparagraph 1. 775 3. The corporation shall provide written notice to its 776 policyholders and the agents of record informing them of their 777 option to accept one of the take-out offers presented or to 778 remain with the corporation. The notice must be in a format 779 prescribed by the corporation and include the amount of the 780 estimated premium for the coverage of each offering insurer, the 781 amount of the premium for the coverage provided by the 782 corporation, and a description of the coverage offered by each 783 insurer and the coverage provided by the corporation, which 784 includes an explanation of any differences among the coverage 785 offered by each insurer and the coverage provided by the 786 corporation. 787 Section 2. Subsection (5) of section 627.3518, Florida 788 Statutes, is amended to read: 789 627.3518 Citizens Property Insurance Corporation 790 policyholder eligibility clearinghouse program.—The purpose of 791 this section is to provide a framework for the corporation to 792 implement a clearinghouse program by January 1, 2014. 793 (5) Notwithstanding s. 627.3517, any applicant for new 794 coverage from the corporation is not eligible for coverage from 795 the corporation if provided an offer of coverage from an 796 authorized insurer through the program at a premium that is at 797 or below the eligibility threshold established in s. 798 627.351(6)(c)5.a. Whenever an offer of coverage for a personal 799 lines risk is received for a policyholder of the corporation at 800 renewal from an authorized insurer through the program, if the 801 offer is equal to or less than the corporation’s renewal premium 802 for comparable coverage, the risk is not eligible for coverage 803 with the corporation. In the event an offer of coverage for a 804 new applicant is received from an authorized insurer through the 805 program, and the premium offered exceeds the eligibility 806 threshold contained in s. 627.351(6)(c)5.a., the applicant or 807 insured may elect to accept such coverage, or may elect to 808 accept or continue coverage with the corporation. In the event 809 an offer of coverage for a personal lines risk is received from 810 an authorized insurer at renewal through the program, and the 811 premium offered is more than the corporation’s renewal premium 812 for comparable coverage, the insured may elect to accept such 813 coverage, or may elect to accept or continue coverage with the 814 corporation. Section 627.351(6)(c)5.a.(I) does not apply to an 815 offer of coverage from an authorized insurer obtained through 816 the program. An applicant for coverage from the corporation who 817 in the previous 36 months has been assumed through a take-out 818 offer from an insurer or who was declared ineligible for 819 coverage at renewal by the corporation in the previous 36 months 820 due to an offer of coverage pursuant to this subsection shall be 821 considered a renewal under this section if the corporation 822 determines that the same authorized insurer making the offer of 823 coveragepursuant to this subsectioncontinues to insure the 824 applicant and increased the rate on the policy in excess of the 825 increase allowed for the corporation under s. 627.351(6)(n)6. 826 Section 3. This act shall take effect July 1, 2016.