Bill Text: FL S1772 | 2017 | Regular Session | Introduced
Bill Title: Florida Hurricane Catastrophe Fund
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2017-05-05 - Died in Banking and Insurance [S1772 Detail]
Download: Florida-2017-S1772-Introduced.html
Florida Senate - 2017 SB 1772 By Senator Lee 20-00594B-17 20171772__ 1 A bill to be entitled 2 An act relating to the Florida Hurricane Catastrophe 3 Fund; amending s. 215.555, F.S.; revising the term 4 “retention”; adding specified coverage level options 5 required in reimbursement contracts between the State 6 Board of Administration and insurers writing policies 7 in this state; revising, beginning with a specified 8 timeframe, the obligation limits of the board with 9 respect to all contracts covering a particular 10 contract year; revising, beginning with a specified 11 timeframe, the calculation of the cash build-up factor 12 used in the formula for determining reimbursement 13 premiums paid to the fund; revising provisions 14 relating to optional coverage offered by the board; 15 defining terms; requiring the board to offer such 16 optional coverage beginning with a specified 17 timeframe; specifying Flexible Layered Options (FLO) 18 coverage multiples; specifying requirements for FLO 19 reimbursement premiums and FLO options addendums; 20 providing construction relating to the optional 21 coverage’s effect on the fund’s claims-paying 22 capacity; amending s. 627.062, F.S.; deleting the 23 actual costs paid due to applying the cash build-up 24 factor as a basis for certain separate rate filings 25 under certain circumstances by residential property 26 insurers; amending s. 627.0629, F.S.; conforming a 27 provision to changes made by the act; amending s. 28 627.351, F.S.; deleting a provision authorizing 29 Citizens Property Insurance Corporation to implement 30 rate increases to reflect the effect of the cash 31 build-up factor; providing an effective date. 32 33 Be It Enacted by the Legislature of the State of Florida: 34 35 Section 1. Paragraph (e) of subsection (2), paragraphs (b) 36 and (c) of subsection (4), paragraph (b) of subsection (5), and 37 subsection (16) of section 215.555, Florida Statutes, are 38 amended, and paragraph (a) of subsection (4) is republished, to 39 read: 40 215.555 Florida Hurricane Catastrophe Fund.— 41 (2) DEFINITIONS.—As used in this section: 42 (e) “Retention” means the amount of losses below which an 43 insurer is not entitled to reimbursement from the fund. An 44 insurer’s retention shall be calculated as follows: 45 1. The board shall calculate and report to each insurer the 46 retention multiples for that year. For the contract year 47 beginning June 1, 2005, the retention multiple shall be equal to 48 $4.5 billion divided by the total estimated reimbursement 49 premium for the contract year; for subsequent years, the 50 retention multiple shall be equal to $4.5 billion, adjusted 51 based upon the reported exposure for the contract year occurring 52 2 years before the particular contract year to reflect the 53 percentage growth in exposure to the fund for covered policies 54 since 2004, divided by the total estimated reimbursement premium 55 for the contract year. Total reimbursement premium for purposes 56 of the calculation under this subparagraph shall be estimated 57 using the assumption that all insurers have selected the 90 58 percent coverage level. 59 2. The retention multiple as determined under subparagraph 60 1. shall be adjusted to reflect the coverage level elected by 61 the insurer. 62 a. For insurers electing the 90-percent coverage level, the 63 adjusted retention multiple is 100 percent of the amount 64 determined under subparagraph 1. 65 b. For insurers electing the 75-percent coverage level, the 66 retention multiple is 120 percent of the amount determined under 67 subparagraph 1. 68 c. For insurers electing the 60-percent coverage level, the 69 adjusted retention multiple is 150 percent of the amount 70 determined under subparagraph 1. 71 d. For insurers electing the 45-percent coverage level, the 72 adjusted retention multiple is 200 percent of the amount 73 determined under subparagraph 1. 74 e. For insurers electing the 25-percent coverage level, the 75 adjusted retention multiple is 360 percent of the amount 76 determined under subparagraph 1. 77 3. An insurer shall determine its provisional retention by 78 multiplying its provisional reimbursement premium by the 79 applicable adjusted retention multiple and shall determine its 80 actual retention by multiplying its actual reimbursement premium 81 by the applicable adjusted retention multiple. 82 4. For insurers who experience multiple covered events 83 causing loss during the contract year,beginning June 1, 2005,84 each insurer’s full retention shall be applied to each of the 85 covered events causing the two largest losses for that insurer. 86 For each other covered event resulting in losses, the insurer’s 87 retention shall be reduced to one-third of the full retention. 88 The reimbursement contract shall provide for the reimbursement 89 of losses for each covered event based on the full retention 90 with adjustments made to reflect the reduced retentions on or 91 after January 1 of the contract year provided the insurer 92 reports its losses as specified in the reimbursement contract. 93 (4) REIMBURSEMENT CONTRACTS.— 94 (a) The board shall enter into a contract with each insurer 95 writing covered policies in this state to provide to the insurer 96 the reimbursement described in paragraphs (b) and (d), in 97 exchange for the reimbursement premium paid into the fund under 98 subsection (5). As a condition of doing business in this state, 99 each such insurer shall enter into such a contract. 100 (b)1. The contract mustshallcontain a promise by the 101 board to reimburse the insurer for 25 percent, 45 percent, 60 102 percent, 75 percent, or 90 percent of its losses from each 103 covered event in excess of the insurer’s retention, plus 5 104 percent of the reimbursed losses to cover loss adjustment 105 expenses. 106 2. The insurer must elect one of the percentage coverage 107 levels specified in this paragraph and may, upon renewal of a 108 reimbursement contract, elect a lower percentage coverage level 109 if no revenue bonds issued under subsection (6) after a covered 110 event are outstanding, or elect a higher percentage coverage 111 level, regardless of whether or not revenue bonds are 112 outstanding. All members of an insurer group must elect the same 113 percentage coverage level. Any joint underwriting association, 114 risk apportionment plan, or other entity created under s. 115 627.351 must elect the 90-percent coverage level. 116 3. The contract shall provide that reimbursement amounts 117 shall not be reduced by reinsurance paid or payable to the 118 insurer from other sources. 119 (c)1. Beginning in the 2018-2019 contract year, the 120 contract mustshallalso provide that the obligation of the 121 board with respect to all contracts covering a particular 122 contract year mayshallnot exceed the actual claims-paying 123 capacity of the fund up to a limit of $14$17billion for that 124 contract year, unless the board determines that there is 125 sufficient estimated claims-paying capacity to provide $14$17126 billion of capacity for the current contract year and an 127 additional $14$17billion of capacity for subsequent contract 128 years. If the board makes such a determination, the estimated 129 claims-paying capacity for the particular contract year must 130shallbe determined by adding to the $14$17billion limit one 131 half of the fund’s estimated claims-paying capacity in excess of 132 $28$34billion. However, the dollar growth in the limit may not 133 increase in any year by an amount greater than the dollar growth 134 of the balance of the fund as of December 31, less any premiums 135 or interest attributable to optional coverage, as defined by 136 rule which occurred over the prior calendar year. 137 2. In May and October of the contract year, the board shall 138 publish in the Florida Administrative Register a statement of 139 the fund’s estimated borrowing capacity, the fund’s estimated 140 claims-paying capacity, and the projected balance of the fund as 141 of December 31. After the end of each calendar year, the board 142 shall notify insurers of the estimated borrowing capacity, the 143 estimated claims-paying capacity, and the balance of the fund as 144 of December 31 to provide insurers with data necessary to assist 145 them in determining their retention and projected payout from 146 the fund for loss reimbursement purposes. In conjunction with 147 the development of the premium formula, as provided for in 148 subsection (5), the board shall publish factors or multiples 149 that assist insurers in determining their retention and 150 projected payout for the next contract year. For all regulatory 151 and reinsurance purposes, an insurer may calculate its projected 152 payout from the fund as its share of the total fund premium for 153 the current contract year multiplied by the sum of the projected 154 balance of the fund as of December 31 and the estimated 155 borrowing capacity for that contract year as reported under this 156 subparagraph. 157 (5) REIMBURSEMENT PREMIUMS.— 158 (b) The State Board of Administration shall select an 159 independent consultant to develop a formula for determining the 160 actuarially indicated premium to be paid to the fund. The 161 formula shall specify, for each zip code or other limited 162 geographical area, the amount of premium to be paid by an 163 insurer for each $1,000 of insured value under covered policies 164 in that zip code or other area. In establishing premiums, the 165 board shall consider the coverage elected under paragraph (4)(b) 166 and any factors that tend to enhance the actuarial 167 sophistication of ratemaking for the fund, including 168 deductibles, type of construction, type of coverage provided, 169 relative concentration of risks, and other such factors deemed 170 by the board to be appropriate. The formula must provide for a 171 cash build-up factor. Beginning in the 2018-2019For the 20091722010 contract year, the factor is 5 percent. For the 2010-2011173contract year, the factor is 10 percent. For the 2011-2012174contract year, the factor is 15 percent. For the 2012-2013175contract year, the factor is 20 percent. For the 2013-2014176 contract year and thereafter, the factor is 1025percent until 177 the fund balance before the start of a contract year is $14 178 billion or greater, at which point the cash build-up factor may 179 not be collected. If the fund balance is less than $14 billion 180 after the end of a contract year, the cash build-up factor must 181 be reinstated at 5 percent for the next contract year and 182 increase by 5 percent each subsequent contract year until it 183 reaches 25 percent, and must thereafter continue at 25 percent 184 per contract year until the fund balance reaches $14 billion. 185 The formula may provide for a procedure to determine the 186 premiums to be paid by new insurers that begin writing covered 187 policies after the beginning of a contract year, taking into 188 consideration when the insurer starts writing covered policies, 189 the potential exposure of the insurer, the potential exposure of 190 the fund, the administrative costs to the insurer and to the 191 fund, and any other factors deemed appropriate by the board. The 192 formula must be approved by unanimous vote of the board. The 193 board may, at any time, revise the formula pursuant to the 194 procedure provided in this paragraph. 195 (16) OPTIONAL COVERAGE.— 196 (a) Additional definitions.—As used in this subsection, the 197 term: 198 1. “FHCF” means the Florida Hurricane Catastrophe Fund. 199 2. “FHCF reimbursement premium” means the premium paid by 200 an insurer for its coverage as a mandatory participant in the 201 FHCF, but does not include additional premiums for optional 202 coverages. 203 3. “FLO” means Flexible Layered Options. 204 4. “FLO coverage” means the coverage for an insurer’s 205 losses above the insurer’s statutorily determined claims-paying 206 capacity based on the claims-paying limit in subparagraph 207 (4)(c)1., which an insurer selects as its increase in coverage 208 from the fund under the FLO options selected. 209 5. “FLO coverage multiple” means the coverage multiple that 210 when multiplied by an insurer’s reimbursement premium defines 211 the temporary increase in coverage limit. 212 6. “FLO insurer” means an insurer that has opted to obtain 213 coverage under the FLO options addendum in addition to the 214 coverage provided to the insurer under its FHCF reimbursement 215 contract. 216 7. “FLO options” means the coverage options created under 217 this subsection. 218 8. “FLO options addendum” means an addendum to the 219 reimbursement contract reflecting the obligations of the fund 220 and insurers selecting an option to increase an insurer’s FHCF 221 coverage limit. 222 9. “FLO reimbursement premium” means the premium charged by 223 the fund for coverage provided under the FLO option. 224 10. “Payout multiple” means the number or multiple created 225 by dividing the statutorily defined claims-paying capacity as 226 determined in subparagraph (4)(c)1. by the aggregate 227 reimbursement premiums paid by all insurers estimated or 228 projected as of calendar year-end. 229 (b) Effective date.—For the 2018-2019 contract year and 230 thereafter, the board shall offer the optional coverage as 231 provided in this subsection. 232 (c) FLO coverage multiples.—The board shall calculate and 233 report to each FLO insurer the FLO coverage multiples based on 3 234 options for increasing the insurer’s FHCF coverage limit. Each 235 FLO coverage multiple must be calculated by dividing $1 billion, 236 $2 billion, or $3 billion by the total estimated aggregate FHCF 237 reimbursement premium for the upcoming contract year. 238 (d) FLO reimbursement premiums.—Each FLO insurer shall pay 239 to the fund, in the manner and at the time provided in the 240 reimbursement contract for payment of reimbursement premiums, a 241 FLO reimbursement premium determined according to subsection 242 (5), except that a cash build-up factor does not apply to the 243 FLO reimbursement premiums. 244 (e) FLO options addendum.— 245 1. The FLO options addendum must provide for reimbursement 246 of FLO insurers for covered events occurring during a contract 247 year in exchange for the FLO reimbursement premium paid into the 248 fund under paragraph (d), based on the FLO coverage selected for 249 each respective contract year. An insurer writing covered 250 policies has the option of selecting an increased limit of 251 coverage under the FLO options addendum and must select such 252 coverage at the time that it executes the FHCF reimbursement 253 contract. 254 2. The FLO addendum must contain a promise by the board to 255 reimburse the FLO insurer for 25 percent, 45 percent, 60 256 percent, 75 percent, or 90 percent of its losses from each 257 covered event in excess of the insurer’s retention, plus 5 258 percent of the reimbursed losses to cover loss adjustment 259 expenses. The percentage must be the same as the coverage level 260 selected by the insurer under paragraph (4)(b). 261 3. The FLO addendum must provide that reimbursement amounts 262 may not be reduced by reinsurance paid or payable to the insurer 263 from other sources. 264 4. The priorities, schedule, and method of reimbursements 265 under the FLO addendum must be the same as provided under 266 subsection (4). 267 (f) Effect on claims-paying capacity of the fund.—The 268 program created by this subsection must increase the claims 269 paying capacity of the fund as provided in subparagraph (4)(c)1. 270 by an amount not to exceed $3 billion and must depend on the FLO 271 coverage options selected for the specified contract year and 272 the number of insurers that select a FLO optional coverage. The 273 additional capacity may apply only to the additional coverage 274 provided under the FLO options and may not otherwise affect any 275 insurer’s reimbursement from the fund if the insurer chooses not 276 to select the FLO option to increase its limit of coverage under 277 the FHCFTEMPORARY INCREASE IN COVERAGE LIMIT OPTIONS.—278(a)Findings and intent.—2791. The Legislature finds that:280a. Because of temporary disruptions in the market for281catastrophic reinsurance, many property insurers were unable to282procure sufficient amounts of reinsurance for the 2006 hurricane283season or were able to procure such reinsurance only by284incurring substantially higher costs than in prior years.285b. The reinsurance market problems were responsible, at286least in part, for substantial premium increases to many287consumers and increases in the number of policies issued by288Citizens Property Insurance Corporation.289c. It is likely that the reinsurance market disruptions290will not significantly abate prior to the 2007 hurricane season.2912. It is the intent of the Legislature to create options292for insurers to purchase a temporary increased coverage limit293above the statutorily determined limit in subparagraph (4)(c)1.,294applicable for the 2007, 2008, 2009, 2010, 2011, 2012, and 2013295hurricane seasons, to address market disruptions and enable296insurers, at their option, to procure additional coverage from297the Florida Hurricane Catastrophe Fund.298(b)Applicability of other provisions of this section.—All299provisions of this section and the rules adopted under this300section apply to the coverage created by this subsection unless301specifically superseded by provisions in this subsection.302(c)Optional coverage.—For the 2009-2010, 2010-2011, 20113032012, 2012-2013, and 2013-2014 contract years, the board shall304offer, for each of such years, the optional coverage as provided305in this subsection.306(d)Additional definitions.—As used in this subsection, the307term:3081. “FHCF” means Florida Hurricane Catastrophe Fund.3092. “FHCF reimbursement premium” means the premium paid by310an insurer for its coverage as a mandatory participant in the311FHCF, but does not include additional premiums for optional312coverages.3133. “Payout multiple” means the number or multiple created314by dividing the statutorily defined claims-paying capacity as315determined in subparagraph (4)(c)1. by the aggregate316reimbursement premiums paid by all insurers estimated or317projected as of calendar year-end.3184. “TICL” means the temporary increase in coverage limit.3195. “TICL options” means the temporary increase in coverage320options created under this subsection.3216. “TICL insurer” means an insurer that has opted to obtain322coverage under the TICL options addendum in addition to the323coverage provided to the insurer under its FHCF reimbursement324contract.3257. “TICL reimbursement premium” means the premium charged326by the fund for coverage provided under the TICL option.3278. “TICL coverage multiple” means the coverage multiple328when multiplied by an insurer’s reimbursement premium that329defines the temporary increase in coverage limit.3309. “TICL coverage” means the coverage for an insurer’s331losses above the insurer’s statutorily determined claims-paying332capacity based on the claims-paying limit in subparagraph333(4)(c)1., which an insurer selects as its temporary increase in334coverage from the fund under the TICL options selected. A TICL335insurer’s increased coverage limit options shall be calculated336as follows:337a. The board shall calculate and report to each TICL338insurer the TICL coverage multiples based on 12 options for339increasing the insurer’s FHCF coverage limit. Each TICL coverage340multiple shall be calculated by dividing $1 billion, $2 billion,341$3 billion, $4 billion, $5 billion, $6 billion, $7 billion, $8342billion, $9 billion, $10 billion, $11 billion, or $12 billion by343the total estimated aggregate FHCF reimbursement premiums for344the 2007-2008 contract year, and the 2008-2009 contract year.345b. For the 2009-2010 contract year, the board shall346calculate and report to each TICL insurer the TICL coverage347multiples based on 10 options for increasing the insurer’s FHCF348coverage limit. Each TICL coverage multiple shall be calculated349by dividing $1 billion, $2 billion, $3 billion, $4 billion, $5350billion, $6 billion, $7 billion, $8 billion, $9 billion, and $10351billion by the total estimated aggregate FHCF reimbursement352premiums for the 2009-2010 contract year.353c. For the 2010-2011 contract year, the board shall354calculate and report to each TICL insurer the TICL coverage355multiples based on eight options for increasing the insurer’s356FHCF coverage limit. Each TICL coverage multiple shall be357calculated by dividing $1 billion, $2 billion, $3 billion, $4358billion, $5 billion, $6 billion, $7 billion, and $8 billion by359the total estimated aggregate FHCF reimbursement premiums for360the contract year.361d. For the 2011-2012 contract year, the board shall362calculate and report to each TICL insurer the TICL coverage363multiples based on six options for increasing the insurer’s FHCF364coverage limit. Each TICL coverage multiple shall be calculated365by dividing $1 billion, $2 billion, $3 billion, $4 billion, $5366billion, and $6 billion by the total estimated aggregate FHCF367reimbursement premiums for the 2011-2012 contract year.368e. For the 2012-2013 contract year, the board shall369calculate and report to each TICL insurer the TICL coverage370multiples based on four options for increasing the insurer’s371FHCF coverage limit. Each TICL coverage multiple shall be372calculated by dividing $1 billion, $2 billion, $3 billion, and373$4 billion by the total estimated aggregate FHCF reimbursement374premiums for the 2012-2013 contract year.375f. For the 2013-2014 contract year, the board shall376calculate and report to each TICL insurer the TICL coverage377multiples based on two options for increasing the insurer’s FHCF378coverage limit. Each TICL coverage multiple shall be calculated379by dividing $1 billion and $2 billion by the total estimated380aggregate FHCF reimbursement premiums for the 2013-2014 contract381year.382g. The TICL insurer’s increased coverage shall be the FHCF383reimbursement premium multiplied by the TICL coverage multiple.384In order to determine an insurer’s total limit of coverage, an385insurer shall add its TICL coverage multiple to its payout386multiple. The total shall represent a number that, when387multiplied by an insurer’s FHCF reimbursement premium for a388given reimbursement contract year, defines an insurer’s total389limit of FHCF reimbursement coverage for that reimbursement390contract year.39110. “TICL options addendum” means an addendum to the392reimbursement contract reflecting the obligations of the fund393and insurers selecting an option to increase an insurer’s FHCF394coverage limit.395(e)TICL options addendum.—3961. The TICL options addendum shall provide for397reimbursement of TICL insurers for covered events occurring398during the 2009-2010, 2010-2011, 2011-2012, 2012-2013, and 20133992014 contract years in exchange for the TICL reimbursement400premium paid into the fund under paragraph (f) based on the TICL401coverage available and selected for each respective contract402year. Any insurer writing covered policies has the option of403selecting an increased limit of coverage under the TICL options404addendum and shall select such coverage at the time that it405executes the FHCF reimbursement contract.4062. The TICL addendum shall contain a promise by the board407to reimburse the TICL insurer for 45 percent, 75 percent, or 90408percent of its losses from each covered event in excess of the409insurer’s retention, plus 5 percent of the reimbursed losses to410cover loss adjustment expenses. The percentage shall be the same411as the coverage level selected by the insurer under paragraph412(4)(b).4133. The TICL addendum shall provide that reimbursement414amounts shall not be reduced by reinsurance paid or payable to415the insurer from other sources.4164. The priorities, schedule, and method of reimbursements417under the TICL addendum shall be the same as provided under418subsection (4).419(f)TICL reimbursement premiums.—Each TICL insurer shall420pay to the fund, in the manner and at the time provided in the421reimbursement contract for payment of reimbursement premiums, a422TICL reimbursement premium determined as specified in subsection423(5), except that a cash build-up factor does not apply to the424TICL reimbursement premiums. However, the TICL reimbursement425premium shall be increased in the 2009-2010 contract year by a426factor of two, in the 2010-2011 contract year by a factor of427three, in the 2011-2012 contract year by a factor of four, in428the 2012-2013 contract year by a factor of five, and in the4292013-2014 contract year by a factor of six.430(g)Effect on claims-paying capacity of the fund.—For the4312009-2010, 2010-2011, 2011-2012, 2012-2013, and 2013-2014432contract years, the program created by this subsection shall433increase the claims-paying capacity of the fund as provided in434subparagraph (4)(c)1. by an amount not to exceed $12 billion and435shall depend on the TICL coverage options available and selected436for the specified contract year and the number of insurers that437select the TICL optional coverage. The additional capacity shall438apply only to the additional coverage provided under the TICL439options and shall not otherwise affect any insurer’s440reimbursement from the fund if the insurer chooses not to select441the temporary option to increase its limit of coverage under the442FHCF. 443 Section 2. Paragraph (k) of subsection (2) of section 444 627.062, Florida Statutes, is amended to read: 445 627.062 Rate standards.— 446 (2) As to all such classes of insurance: 447 (k)1. A residential property insurer may make a separate 448 filing limited solely to an adjustment of its rates for 449 reinsurance, the cost of financing products used as a 450 replacement for reinsurance, and financing costs incurred in the 451 purchase of reinsurance, and the actual cost paid due to the452application of the cash build-up factor pursuant to s.453215.555(5)(b)if the insurer: 454 a. Elects to purchase financing products such as a 455 liquidity instrument or line of credit, in which case the cost 456 included in filing for the liquidity instrument or line of 457 credit may not result in a premium increase exceeding 3 percent 458 for any individual policyholder. All costs contained in the 459 filing may not result in an overall premium increase of more 460 than 15 percent for any individual policyholder. 461 b. Includes in the filing a copy of all of its reinsurance, 462 liquidity instrument, or line of credit contracts; proof of the 463 billing or payment for the contracts; and the calculation upon 464 which the proposed rate change is based demonstrating that the 465 costs meet the criteria of this section. 466 2. An insurer that purchases reinsurance or financing 467 products from an affiliated company may make a separate filing 468 only if the costs for such reinsurance or financing products are 469 charged at or below charges made for comparable coverage by 470 nonaffiliated reinsurers or financial entities making such 471 coverage or financing products available in this state. 472 3. An insurer may make only one filing per 12-month period 473 under this paragraph. 474 4. An insurer that elects to implement a rate change under 475 this paragraph must file its rate filing with the office at 476 least 45 days before the effective date of the rate change. 477 After an insurer submits a complete filing that meets all of the 478 requirements of this paragraph, the office has 45 days after the 479 date of the filing to review the rate filing and determine if 480 the rate is excessive, inadequate, or unfairly discriminatory. 481 482 The provisions of this subsection do not apply to workers’ 483 compensation, employer’s liability insurance, and motor vehicle 484 insurance. 485 Section 3. Subsection (5) of section 627.0629, Florida 486 Statutes, is amended to read: 487 627.0629 Residential property insurance; rate filings.— 488 (5) In order to provide an appropriate transition period, 489 an insurer may implement an approved rate filing for residential 490 property insurance over a period of years. Such insurer must 491 provide an informational notice to the office setting out its 492 schedule for implementation of the phased-in rate filing. The 493 insurer may include in its rate the actual cost of private 494 market reinsurance that corresponds to available coverage of the 495 Flexible Layered OptionsTemporary Increase in Coverage Limits,496TICL,from the Florida Hurricane Catastrophe Fund.The insurer497may also include the cost of reinsurance to replace the TICL498reduction implemented pursuant to s. 215.555(16)(d)9.However, 499 this cost for reinsurance may not include any expense or profit 500 load or result in a total annual base rate increase in excess of 501 10 percent. 502 Section 4. Paragraph (n) of subsection (6) of section 503 627.351, Florida Statutes, is amended to read: 504 627.351 Insurance risk apportionment plans.— 505 (6) CITIZENS PROPERTY INSURANCE CORPORATION.— 506 (n)1. Rates for coverage provided by the corporation must 507 be actuarially sound and subject to s. 627.062, except as 508 otherwise provided in this paragraph. The corporation shall file 509 its recommended rates with the office at least annually. The 510 corporation shall provide any additional information regarding 511 the rates which the office requires. The office shall consider 512 the recommendations of the board and issue a final order 513 establishing the rates for the corporation within 45 days after 514 the recommended rates are filed. The corporation may not pursue 515 an administrative challenge or judicial review of the final 516 order of the office. 517 2. In addition to the rates otherwise determined pursuant 518 to this paragraph, the corporation shall impose and collect an 519 amount equal to the premium tax provided in s. 624.509 to 520 augment the financial resources of the corporation. 521 3. After the public hurricane loss-projection model under 522 s. 627.06281 has been found to be accurate and reliable by the 523 Florida Commission on Hurricane Loss Projection Methodology, the 524 model shall be considered when establishing the windstorm 525 portion of the corporation’s rates. The corporation may use the 526 public model results in combination with the results of private 527 models to calculate rates for the windstorm portion of the 528 corporation’s rates. This subparagraph does not require or allow 529 the corporation to adopt rates lower than the rates otherwise 530 required or allowed by this paragraph. 531 4. The rate filings for the corporation which were approved 532 by the office and took effect January 1, 2007, are rescinded, 533 except for those rates that were lowered. As soon as possible, 534 the corporation shall begin using the lower rates that were in 535 effect on December 31, 2006, and provide refunds to 536 policyholders who paid higher rates as a result of that rate 537 filing. The rates in effect on December 31, 2006, remain in 538 effect for the 2007 and 2008 calendar years except for any rate 539 change that results in a lower rate. The next rate change that 540 may increase rates shall take effect pursuant to a new rate 541 filing recommended by the corporation and established by the 542 office, subject to this paragraph. 543 5. Beginning on July 15, 2009, and annually thereafter, the 544 corporation must make a recommended actuarially sound rate 545 filing for each personal and commercial line of business it 546 writes, to be effective no earlier than January 1, 2010. 547 6. Beginning on or after January 1, 2010, and 548 notwithstanding the board’s recommended rates and the office’s 549 final order regarding the corporation’s filed rates under 550 subparagraph 1., the corporation shall annually implement a rate 551 increase which, except for sinkhole coverage, does not exceed 10 552 percent for any single policy issued by the corporation, 553 excluding coverage changes and surcharges. 5547. The corporation may also implement an increase to555reflect the effect on the corporation of the cash buildup factor556pursuant to s. 215.555(5)(b).557 7.8.The corporation’s implementation of rates as 558 prescribed in subparagraph 6. shall cease for any line of 559 business written by the corporation upon the corporation’s 560 implementation of actuarially sound rates. Thereafter, the 561 corporation shall annually make a recommended actuarially sound 562 rate filing for each commercial and personal line of business 563 the corporation writes. 564 Section 5. This act shall take effect January 1, 2018.