Bill Text: FL S2044 | 2010 | Regular Session | Enrolled

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Bill Title: Insurance [CPSC]

Spectrum: Partisan Bill (Republican 2-0)

Status: (Vetoed) 2010-07-20 - Veto Message received (2010-C) -SJ 00004; Veto Message referred to Rules -SJ 00005 [S2044 Detail]

Download: Florida-2010-S2044-Enrolled.html

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ENROLLED 
2010 Legislature            CS for CS for SB 2044, 2nd Engrossed 
20102044er 
1 
2         An act relating to insurance; amending s. 215.555, 
3         F.S.; delaying the repeal of a provision exempting 
4         medical malpractice insurance premiums from emergency 
5         assessments to the Hurricane Catastrophe Fund; 
6         delaying the date on and after which medical 
7         malpractice insurance premiums become subject to 
8         emergency assessments; amending s. 624.408, F.S.; 
9         revising the minimum surplus as to policyholders which 
10         must be maintained by certain insurers; authorizing 
11         the Office of Insurance Regulation to reduce the 
12         surplus requirement under specified circumstances; 
13         amending s. 624.4085, F.S.; defining the term “surplus 
14         action level”; expanding the list of items that must 
15         be included in an insurer’s risk-based capital plan; 
16         specifying actions constituting a surplus action level 
17         event; requiring that an insurer submit to the office 
18         a risk-based capital plan upon the occurrence of such 
19         event; providing requirements for such plan; 
20         preserving the existing authority of the office; 
21         amending s. 624.4095, F.S.; excluding certain premiums 
22         for federal multiple-peril crop insurance from 
23         calculations for an insurer’s gross writing ratio; 
24         requiring insurers to disclose the gross written 
25         premiums for federal multiple-peril crop insurance in 
26         a financial statement; amending s. 626.221, F.S.; 
27         exempting certain individuals from the requirement to 
28         pass an examination before being issued a license as 
29         an agent, customer representative, or adjuster; 
30         amending s. 624.424, F.S.; revising the frequency that 
31         an insurer may use the same accountant or partner to 
32         prepare an annual audited financial report; amending 
33         s. 626.7452, F.S.; removing an exception relating to 
34         the examination of managing general agents; amending 
35         s. 626.854, F.S.; providing statements that may be 
36         considered deceptive or misleading if made in any 
37         public adjuster’s advertisement or solicitation; 
38         providing a definition for the term “written 
39         advertisement”; requiring that a disclaimer be 
40         included in any public adjuster’s written 
41         advertisement; providing requirements for such 
42         disclaimer; providing limitations on the amount of 
43         compensation that may be received for a reopened or 
44         supplemental claim; requiring certain persons who act 
45         on behalf of an insurer to provide notice to the 
46         insurer, claimant, public adjuster, or legal 
47         representative for an onsite inspection of the insured 
48         property; authorizing the insured or claimant to deny 
49         access to the property if notice is not provided; 
50         requiring the public adjuster to ensure prompt notice 
51         of certain property loss claims; providing that an 
52         insurer be allowed to interview the insured directly 
53         about the loss claim; prohibiting the insurer from 
54         obstructing or preventing the public adjuster from 
55         communicating with the insured; requiring that the 
56         insurer communicate with the public adjuster in an 
57         effort to reach agreement as to the scope of the 
58         covered loss under the insurance policy; prohibiting a 
59         public adjuster from restricting or preventing persons 
60         acting on behalf of the insured from having reasonable 
61         access to the insured or the insured’s property; 
62         prohibiting a public adjuster from restricting or 
63         preventing the insured’s adjuster from having 
64         reasonable access to or inspecting the insured’s 
65         property; authorizing the insured’s adjuster to be 
66         present for the inspection; prohibiting a licensed 
67         contractor or subcontractor from adjusting a claim on 
68         behalf of an insured if such contractor or 
69         subcontractor is not a licensed public adjuster; 
70         providing an exception; amending s. 626.8651, F.S.; 
71         requiring that a public adjuster apprentice complete a 
72         minimum number of hours of continuing education to 
73         qualify for licensure; amending s. 626.8796, F.S.; 
74         providing requirements for a public adjuster contract; 
75         creating s. 626.70132, F.S.; requiring that notice of 
76         a claim, supplemental claim, or reopened claim be 
77         given to the insurer within a specified period after a 
78         windstorm or hurricane occurs; providing a definition 
79         for the terms “supplemental claim” or “reopened 
80         claim”; providing applicability; amending s. 627.0613, 
81         F.S.; requiring the office of the consumer advocate to 
82         objectively grade insurers annually based on the 
83         number of valid consumer complaints and other 
84         measurable and objective factors; defining the term 
85         “valid consumer complaint”; amending s. 627.062, F.S.; 
86         requiring that the office issue an approval rather 
87         than a notice of intent to approve following its 
88         approval of a file and use filing; prohibiting the 
89         Office of Insurance Regulation from, directly or 
90         indirectly, prohibiting an insurer from paying 
91         acquisition costs based on the full amount of the 
92         premium; prohibiting the Office of Insurance 
93         Regulation from, directly or indirectly, impeding the 
94         right of an insurer to acquire policyholders, 
95         advertise or appoint agents, or regulate agent 
96         commissions; authorizing an insurer to make a rate 
97         filing limited to changes in the cost of reinsurance, 
98         the cost of financing products used as a replacement 
99         for reinsurance, or changes in an inflation trend 
100         factor published annually by the Office of Insurance 
101         Regulation; providing that an insurer may use this 
102         provision only if the increase from such filing and 
103         any other rate filing does not exceed 10 percent for 
104         any policyholder in a policy year; deleting provisions 
105         relating to a rate filing for financing products 
106         relating to the Temporary Increase in Coverage Limits; 
107         revising the information that must be included in a 
108         rate filing relating to certain reinsurance or 
109         financing products; deleting a provision that 
110         prohibited an insurer from making certain rate filings 
111         within a certain period of time after a rate increase; 
112         deleting a provision prohibiting an insurer from 
113         filing for a rate increase within 6 months after it 
114         makes certain rate filings; specifying the information 
115         that an insurer must include in a rate filing based on 
116         the change in an inflation trend factor published by 
117         the Office of Insurance Regulation; requiring that the 
118         office annually publish one or more inflation trend 
119         factors; exempting the inflation trend factors from 
120         rulemaking; providing that an insurer is not required 
121         to adopt an inflation trend factor; requiring the 
122         Office of Insurance Regulation to propose a plan for 
123         developing a website, contingent upon an 
124         appropriation, which provides consumers with 
125         information necessary to make an informed decision 
126         when purchasing homeowners’ insurance; requiring that 
127         the Financial Services Commission review the proposed 
128         plan to implement the website; specifying matters that 
129         the Office of Insurance Regulation must consider in 
130         developing the website; deleting obsolete provisions 
131         relating to legislation enacted during the 2003 
132         Special Session D of the Legislature; amending s. 
133         627.0629, F.S.; providing legislative intent that 
134         insurers provide consumers with accurate pricing 
135         signals for alterations in order to minimize losses, 
136         but that mitigation discounts not result in a loss of 
137         income for the insurer; requiring rate filings for 
138         residential property insurance to include actuarially 
139         reasonable debits that provide proper pricing; 
140         deleting provisions that require the office to develop 
141         certain rate differentials for hurricane mitigation 
142         measures; providing for an increase in base rates if 
143         mitigation discounts exceed the aggregate reduction in 
144         expected losses; requiring the Office of Insurance 
145         Regulation to reevaluate discounts, debits, credits, 
146         and other rate differentials by a certain date; 
147         requiring the Office of Insurance Regulation, in 
148         consultation with the Department of Financial Services 
149         and the Department of Community Affairs, to develop a 
150         method for insurers to establish debits for certain 
151         hurricane mitigation measures by a certain date; 
152         requiring the Financial Services Commission to adopt 
153         rules relating to such debits by a certain date; 
154         deleting a provision that prohibits an insurer from 
155         including an expense or profit load in the cost of 
156         reinsurance to replace the Temporary Increase in 
157         Coverage Limits; amending s. 627.351, F.S.; renaming 
158         the “high-risk account” as the “coastal account”; 
159         revising the conditions under which the Citizens 
160         policyholder surcharge may be imposed; providing that 
161         members of the Citizens Property Insurance Corporation 
162         Board of Governors are not prohibited from practicing 
163         in a certain profession if not prohibited by law or 
164         ordinance; prohibiting board members from voting on 
165         certain measures; changing the date on which the 
166         boundaries of high-risk areas eligible for certain 
167         wind-only coverages will be reduced if certain 
168         circumstances exist; providing a directive to the 
169         Division of Statutory Revision; amending s. 627.4133, 
170         F.S.; authorizing an insurer to cancel policies after 
171         45 days’ notice if the Office of Insurance Regulation 
172         determines that the cancellation of policies is 
173         necessary to protect the interests of the public or 
174         policyholders; authorizing the Office of Insurance 
175         Regulation to place an insurer under administrative 
176         supervision or appoint a receiver upon the consent of 
177         the insurer under certain circumstances; creating s. 
178         627.41341, F.S.; providing definitions; requiring the 
179         delivery of a “Notice of Change in Policy Terms” under 
180         certain circumstances; specifying requirements for 
181         such notice; specifying actions constituting proof of 
182         notice; authorizing policy renewals to contain a 
183         change in policy terms; providing that receipt of 
184         payment by an insurer is deemed acceptance of new 
185         policy terms by an insured; providing that the 
186         original policy remains in effect until the occurrence 
187         of specified events if an insurer fails to provide 
188         notice; providing intent; amending s. 627.7011, F.S.; 
189         requiring that an insurer pay the actual cash value of 
190         an insured loss, less any applicable deductible, under 
191         certain circumstances; requiring that a policyholder 
192         enter into a contract for the performance of building 
193         and structural repairs; requiring that an insurer pay 
194         certain remaining amounts; restricting insurers and 
195         contractors from requiring advance payments for 
196         certain repairs and expenses; authorizing an insured 
197         to make a claim for replacement costs within a certain 
198         period after the insurer pays actual cash value to 
199         make a claim for replacement costs; requiring an 
200         insurer to pay the replacement costs if a total loss 
201         occurs; amending s. 627.70131, F.S.; specifying 
202         application of certain time periods to initial or 
203         supplemental property insurance claim notices and 
204         payments; amending s. 627.711, F.S.; revising the list 
205         of persons qualified to sign certain mitigation 
206         verification forms for certain purposes; authorizing 
207         insurers to accept forms from certain other persons; 
208         providing requirements for persons authorized to sign 
209         mitigation forms; prohibiting misconduct in performing 
210         hurricane mitigation inspection or completing uniform 
211         mitigation forms causing certain harm; specifying what 
212         constitutes misconduct; authorizing certain licensing 
213         boards to commence disciplinary proceedings and impose 
214         administrative fines and sanctions; providing for 
215         liability of mitigation inspectors; requiring certain 
216         entities to file reports of evidence of fraud; 
217         providing for immunity from liability for reporting 
218         fraud; providing for investigative reports from the 
219         Division of Insurance Fraud; providing penalties; 
220         authorizing insurers to require independent 
221         verification of uniform mitigation verification forms; 
222         creating s. 628.252, F.S.; requiring that every 
223         domestic property insurer notify the office of its 
224         intention to enter into certain agreements, contracts, 
225         and arrangements; prohibiting a domestic property 
226         insurer from entering into such agreements, contracts, 
227         or arrangements unless specified criteria are met; 
228         preserving the existing authority of the office; 
229         providing an appropriation to the Office of Insurance 
230         Regulation and authorizing an additional position; 
231         providing effective dates. 
232 
233  Be It Enacted by the Legislature of the State of Florida: 
234 
235         Section 1. Paragraph (b) of subsection (6) of section 
236  215.555, Florida Statutes, is amended to read: 
237         215.555 Florida Hurricane Catastrophe Fund.— 
238         (6) REVENUE BONDS.— 
239         (b) Emergency assessments.— 
240         1. If the board determines that the amount of revenue 
241  produced under subsection (5) is insufficient to fund the 
242  obligations, costs, and expenses of the fund and the 
243  corporation, including repayment of revenue bonds and that 
244  portion of the debt service coverage not met by reimbursement 
245  premiums, the board shall direct the Office of Insurance 
246  Regulation to levy, by order, an emergency assessment on direct 
247  premiums for all property and casualty lines of business in this 
248  state, including property and casualty business of surplus lines 
249  insurers regulated under part VIII of chapter 626, but not 
250  including any workers’ compensation premiums or medical 
251  malpractice premiums. As used in this subsection, the term 
252  “property and casualty business” includes all lines of business 
253  identified on Form 2, Exhibit of Premiums and Losses, in the 
254  annual statement required of authorized insurers by s. 624.424 
255  and any rule adopted under this section, except for those lines 
256  identified as accident and health insurance and except for 
257  policies written under the National Flood Insurance Program. The 
258  assessment shall be specified as a percentage of direct written 
259  premium and is subject to annual adjustments by the board in 
260  order to meet debt obligations. The same percentage shall apply 
261  to all policies in lines of business subject to the assessment 
262  issued or renewed during the 12-month period beginning on the 
263  effective date of the assessment. 
264         2. A premium is not subject to an annual assessment under 
265  this paragraph in excess of 6 percent of premium with respect to 
266  obligations arising out of losses attributable to any one 
267  contract year, and a premium is not subject to an aggregate 
268  annual assessment under this paragraph in excess of 10 percent 
269  of premium. An annual assessment under this paragraph shall 
270  continue as long as the revenue bonds issued with respect to 
271  which the assessment was imposed are outstanding, including any 
272  bonds the proceeds of which were used to refund the revenue 
273  bonds, unless adequate provision has been made for the payment 
274  of the bonds under the documents authorizing issuance of the 
275  bonds. 
276         3. Emergency assessments shall be collected from 
277  policyholders. Emergency assessments shall be remitted by 
278  insurers as a percentage of direct written premium for the 
279  preceding calendar quarter as specified in the order from the 
280  Office of Insurance Regulation. The office shall verify the 
281  accurate and timely collection and remittance of emergency 
282  assessments and shall report the information to the board in a 
283  form and at a time specified by the board. Each insurer 
284  collecting assessments shall provide the information with 
285  respect to premiums and collections as may be required by the 
286  office to enable the office to monitor and verify compliance 
287  with this paragraph. 
288         4. With respect to assessments of surplus lines premiums, 
289  each surplus lines agent shall collect the assessment at the 
290  same time as the agent collects the surplus lines tax required 
291  by s. 626.932, and the surplus lines agent shall remit the 
292  assessment to the Florida Surplus Lines Service Office created 
293  by s. 626.921 at the same time as the agent remits the surplus 
294  lines tax to the Florida Surplus Lines Service Office. The 
295  emergency assessment on each insured procuring coverage and 
296  filing under s. 626.938 shall be remitted by the insured to the 
297  Florida Surplus Lines Service Office at the time the insured 
298  pays the surplus lines tax to the Florida Surplus Lines Service 
299  Office. The Florida Surplus Lines Service Office shall remit the 
300  collected assessments to the fund or corporation as provided in 
301  the order levied by the Office of Insurance Regulation. The 
302  Florida Surplus Lines Service Office shall verify the proper 
303  application of such emergency assessments and shall assist the 
304  board in ensuring the accurate and timely collection and 
305  remittance of assessments as required by the board. The Florida 
306  Surplus Lines Service Office shall annually calculate the 
307  aggregate written premium on property and casualty business, 
308  other than workers’ compensation and medical malpractice, 
309  procured through surplus lines agents and insureds procuring 
310  coverage and filing under s. 626.938 and shall report the 
311  information to the board in a form and at a time specified by 
312  the board. 
313         5. Any assessment authority not used for a particular 
314  contract year may be used for a subsequent contract year. If, 
315  for a subsequent contract year, the board determines that the 
316  amount of revenue produced under subsection (5) is insufficient 
317  to fund the obligations, costs, and expenses of the fund and the 
318  corporation, including repayment of revenue bonds and that 
319  portion of the debt service coverage not met by reimbursement 
320  premiums, the board shall direct the Office of Insurance 
321  Regulation to levy an emergency assessment up to an amount not 
322  exceeding the amount of unused assessment authority from a 
323  previous contract year or years, plus an additional 4 percent 
324  provided that the assessments in the aggregate do not exceed the 
325  limits specified in subparagraph 2. 
326         6. The assessments otherwise payable to the corporation 
327  under this paragraph shall be paid to the fund unless and until 
328  the Office of Insurance Regulation and the Florida Surplus Lines 
329  Service Office have received from the corporation and the fund a 
330  notice, which shall be conclusive and upon which they may rely 
331  without further inquiry, that the corporation has issued bonds 
332  and the fund has no agreements in effect with local governments 
333  under paragraph (c). On or after the date of the notice and 
334  until the date the corporation has no bonds outstanding, the 
335  fund shall have no right, title, or interest in or to the 
336  assessments, except as provided in the fund’s agreement with the 
337  corporation. 
338         7. Emergency assessments are not premium and are not 
339  subject to the premium tax, to the surplus lines tax, to any 
340  fees, or to any commissions. An insurer is liable for all 
341  assessments that it collects and must treat the failure of an 
342  insured to pay an assessment as a failure to pay the premium. An 
343  insurer is not liable for uncollectible assessments. 
344         8. When an insurer is required to return an unearned 
345  premium, it shall also return any collected assessment 
346  attributable to the unearned premium. A credit adjustment to the 
347  collected assessment may be made by the insurer with regard to 
348  future remittances that are payable to the fund or corporation, 
349  but the insurer is not entitled to a refund. 
350         9. When a surplus lines insured or an insured who has 
351  procured coverage and filed under s. 626.938 is entitled to the 
352  return of an unearned premium, the Florida Surplus Lines Service 
353  Office shall provide a credit or refund to the agent or such 
354  insured for the collected assessment attributable to the 
355  unearned premium prior to remitting the emergency assessment 
356  collected to the fund or corporation. 
357         10. The exemption of medical malpractice insurance premiums 
358  from emergency assessments under this paragraph is repealed May 
359  31, 2013 2010, and medical malpractice insurance premiums shall 
360  be subject to emergency assessments attributable to loss events 
361  occurring in the contract years commencing on June 1, 2013 2010. 
362         Section 2. Section 624.408, Florida Statutes, is amended to 
363  read: 
364         624.408 Surplus as to policyholders required; new and 
365  existing insurers.— 
366         (1)(a) To maintain a certificate of authority to transact 
367  any one kind or combinations of kinds of insurance, as defined 
368  in part V of this chapter, an insurer in this state shall at all 
369  times maintain surplus as to policyholders at least not less 
370  than the greater of: 
371         (a)1. Except as provided in paragraphs (e), (f), and (g) 
372  subparagraph 5. and paragraph (b), $1.5 million; 
373         (b)2. For life insurers, 4 percent of the insurer’s total 
374  liabilities; 
375         (c)3. For life and health insurers, 4 percent of the 
376  insurer’s total liabilities plus 6 percent of the insurer’s 
377  liabilities relative to health insurance; or 
378         (d)4. For all insurers other than mortgage guaranty 
379  insurers, life insurers, and life and health insurers, 10 
380  percent of the insurer’s total liabilities. 
381         (e)5. For property and casualty insurers, $4 million, 
382  except property and casualty insurers authorized to underwrite 
383  any line of residential property insurance. 
384         (f)(b) For a residential any property and casualty insurer 
385  not holding a certificate of authority before July 1, 2010 on 
386  December 1, 1993, $15 million. the 
387         (g) For a residential property insurer having a certificate 
388  of authority before July 1, 2010, $5 million until July 1, 2015, 
389  $10 million after July 1, 2015, and $15 million after July 1, 
390  2020. The office may reduce this surplus requirement if the 
391  insurer is not writing new business, has premiums in force of 
392  less than $1 million per year in residential property insurance, 
393  or is a mutual insurance company. following amounts apply 
394  instead of the $4 million required by subparagraph (a)5.: 
395         1. On December 31, 2001, and until December 30, 2002, $3 
396  million. 
397         2. On December 31, 2002, and until December 30, 2003, $3.25 
398  million. 
399         3. On December 31, 2003, and until December 30, 2004, $3.6 
400  million. 
401         4. On December 31, 2004, and thereafter, $4 million. 
402         (2) For purposes of this section, liabilities do shall not 
403  include liabilities required under s. 625.041(4). For purposes 
404  of computing minimum surplus as to policyholders pursuant to s. 
405  625.305(1), liabilities shall include liabilities required under 
406  s. 625.041(4). 
407         (3) This section does not require any No insurer shall be 
408  required under this section to have surplus as to policyholders 
409  greater than $100 million. 
410         (4) A mortgage guaranty insurer shall maintain a minimum 
411  surplus as required by s. 635.042. 
412         Section 3. Present paragraph (q) of subsection (1) of 
413  section 624.4085, Florida Statutes, is redesignated as paragraph 
414  (r), and a new paragraph (q) is added to that subsection, 
415  paragraph (b) of subsection (3) of that section is amended, and 
416  subsections (7) through (13) of that section are redesignated as 
417  subsections (9) through (15), respectively, and new subsections 
418  (7) and (8) are added to that section, to read: 
419         624.4085 Risk-based capital requirements for insurers.— 
420         (1) As used in this section, the term: 
421         (q) “Surplus action level” means a loss of surplus on any 
422  quarterly or annual financial report which exceeds 15 percent, 
423  or which cumulatively for the calendar year exceeds 15 percent 
424  as of the most recent filed quarterly or annual report. 
425         (3) 
426         (b) If a company action level event occurs, the insurer 
427  shall prepare and submit to the office a risk-based capital 
428  plan, which must: 
429         1. Identify the conditions that contribute to the company 
430  action level event; 
431         2. Contain proposals of corrective actions that the insurer 
432  intends to take and that are reasonably expected to result in 
433  the elimination of the company action level event; 
434         3. Provide projections of the insurer’s financial results 
435  in the current year and at least the 4 succeeding years, both in 
436  the absence of proposed corrective actions and giving effect to 
437  the proposed corrective actions, including projections of 
438  statutory operating income, net income, capital, and surplus. 
439  The projections for both new and renewal business may include 
440  separate projections for each major line of business and, if 
441  separate projections are provided, must separately identify each 
442  significant income, expense, and benefit component; 
443         4. Identify the key assumptions affecting the insurer’s 
444  projections and the sensitivity of the projections to the 
445  assumptions; and 
446         5. Identify the quality of, and problems associated with, 
447  the insurer’s business, including, but not limited to, its 
448  assets, anticipated business growth and associated surplus 
449  strain, extraordinary exposure to risk, mix of business, and any 
450  use of reinsurance; and. 
451         6. Include, at the request of the office, for a residential 
452  property insurer that conducts any business with affiliates, a 
453  columnar worksheet, which shall include all affiliates who have 
454  contracted with, done business with, or otherwise received 
455  remuneration from the insurer and shall list the following 
456  financial information from the immediately preceding calendar 
457  year, listed separately for each affiliate: 
458         a. Total assets; 
459         b. Total liabilities; 
460         c. Surplus or shareholders equity; 
461         d. Net income after taxes or distributions made solely for 
462  satisfying tax liabilities; 
463         e. Total amounts received or receivable from parents, 
464  subsidiaries, and affiliates; 
465         f. Total amounts paid or payable to any parent, 
466  subsidiaries, and affiliates; 
467         g. Dividends paid or payable to shareholders of common 
468  stock; 
469         h. Debt service, including principle and interest, paid on 
470  debt incurred to capitalize or recapitalize insurance companies 
471  or fund other insurance-related activities; and 
472         i. Payments made for other contractual obligations to 
473  support insurance-related activities. 
474         (7)(a) A surplus action level event includes: 
475         1.� The filing of a quarterly or annual statutory financial 
476  statement by an insurer, which indicates that the insurer’s 
477  total surplus has declined by more than 15 percent from the 
478  previous year’s annual statement, or cumulatively for the 
479  current year through the most recent quarterly financial 
480  statement; 
481         2.� The notification by the office to the insurer of an 
482  adjusted quarterly or annual financial statement that indicates 
483  an event in subparagraph 1., unless the insurer challenges the 
484  adjusted quarterly or annual financial statement under 
485  subsection (9); or 
486         3.� The notification by the office to the insurer that the 
487  office has, after a hearing, rejected the insurer’s challenge if 
488  an insurer challenges, under subsection (9), an adjusted 
489  quarterly or annual financial statement that indicates an event 
490  in subparagraph 1. 
491         (b) If a surplus action level event occurs, the insurer 
492  must prepare and submit to the office a risk-based capital plan, 
493  which must: 
494         1.� Identify the conditions that contribute to the surplus 
495  action level event; 
496         2.� Contain proposals of corrective actions that the insurer 
497  intends to take and that are reasonably expected to ultimately 
498  result in the elimination of additional surplus losses; 
499         3.� Provide projections of the insurer’s financial results 
500  in the current year and at least the 2 succeeding years, both in 
501  the absence of proposed corrective actions and giving effect to 
502  the proposed corrective actions, including projections of 
503  statutory operating income, net income, capital, and surplus. 
504  The projections for both new and renewal business may include 
505  separate projections for each major line of business and, if 
506  separate projections are provided, must separately identify each 
507  significant income, expense, and benefit component; 
508         4.� Identify the key assumptions affecting the insurer’s 
509  projections and the sensitivity of the projections to the 
510  assumptions; 
511         5.� Identify the quality of, and problems associated with, 
512  the insurer’s business, including, but not limited to, its 
513  assets, anticipated business growth and associated surplus 
514  strain, extraordinary exposure to risk, mix of business, and any 
515  use of reinsurance; 
516         6. Include, at the request of the office, for a residential 
517  property insurer that conducts any business with affiliates, a 
518  columnar worksheet, which shall include all affiliates who have 
519  received remuneration from the insurer and shall list the 
520  following financial information from the immediately preceding 
521  calendar year listed separately for each affiliate: 
522         a. Total assets; 
523         b. Total liabilities; 
524         c. Surplus or shareholders equity; 
525         d. Net income after taxes or distributions made solely for 
526  satisfying tax liabilities; 
527         e. Total amounts received or receivable from parents, 
528  subsidiaries, and affiliates; 
529         f. Total amounts paid or payable to any parent, 
530  subsidiaries, and affiliates; 
531         g. Dividends paid or payable to shareholders of common 
532  stock; 
533         h. Debt service, including principle and interest, paid on 
534  debt incurred to capitalize or recapitalize insurance companies 
535  or fund other insurance-related activities; and 
536         i. Payments made for other contractual obligations to 
537  support insurance-related activities. 
538         7. Contain, at the request of the office, a recertification 
539  of reserves for the insurer prepared by an actuary. 
540         (c)� The risk-based capital plan must be submitted: 
541         1.� Within 45 days after the surplus action level event; or 
542         2.� If the insurer challenges an adjusted quarterly or 
543  annual financial statement under subsection (9), within 45 days 
544  after notification to the insurer that the office has, after a 
545  hearing, rejected the insurer’s challenge. 
546         (8) This section does not limit any existing authority of 
547  the office. 
548         Section 4. Subsection (7) is added to section 624.4095, 
549  Florida Statutes, to read: 
550         624.4095 Premiums written; restrictions.— 
551         (7) For purposes of this section, s. 624.407, and s. 
552  624.408, with regard to capital and surplus requirements, gross 
553  written premiums for federal multiple-peril crop insurance which 
554  are ceded to the Federal Crop Insurance Corporation or 
555  authorized reinsurers may not be included in the calculation of 
556  an insurer’s gross writing ratio. The liabilities for ceded 
557  reinsurance premiums payable for federal multiple-peril crop 
558  insurance ceded to the Federal Crop Insurance Corporation and 
559  authorized reinsurers shall be netted against the asset for 
560  amounts recoverable from reinsurers. Each insurer that writes 
561  other insurance products together with federal multiple-peril 
562  crop insurance shall disclose in the notes to its annual and 
563  quarterly financial statements, or in a supplement to those 
564  statements, the gross written premiums for federal multiple 
565  peril crop insurance. 
566         Section 5. Paragraph (n) is added to subsection (2) of 
567  section 626.221, Florida Statutes, to read: 
568         626.221 Examination requirement; exemptions.— 
569         (2) However, no such examination shall be necessary in any 
570  of the following cases: 
571         (n) An applicant for license as a customer representative 
572  with respect to property insurance who has earned the 
573  designation of Certified Insurance Representative (CIR) from the 
574  National Association of Christian Catastrophe Insurance 
575  Adjusters. 
576         Section 6. Subsection (8) of section 624.424, Florida 
577  Statutes, is amended to read: 
578         624.424 Annual statement and other information.— 
579         (8)(a) All authorized insurers must have conducted an 
580  annual audit by an independent certified public accountant and 
581  must file an audited financial report with the office on or 
582  before June 1 for the preceding year ending December 31. The 
583  office may require an insurer to file an audited financial 
584  report earlier than June 1 upon 90 days’ advance notice to the 
585  insurer. The office may immediately suspend an insurer’s 
586  certificate of authority by order if an insurer’s failure to 
587  file required reports, financial statements, or information 
588  required by this subsection or rule adopted pursuant thereto 
589  creates a significant uncertainty as to the insurer’s continuing 
590  eligibility for a certificate of authority. 
591         (b) Any authorized insurer otherwise subject to this 
592  section having direct premiums written in this state of less 
593  than $1 million in any calendar year and fewer than 1,000 
594  policyholders or certificateholders of directly written policies 
595  nationwide at the end of such calendar year is exempt from this 
596  section for such year unless the office makes a specific finding 
597  that compliance is necessary in order for the office to carry 
598  out its statutory responsibilities. However, any insurer having 
599  assumed premiums pursuant to contracts or treaties or 
600  reinsurance of $1 million or more is not exempt. Any insurer 
601  subject to an exemption must submit by March 1 following the 
602  year to which the exemption applies an affidavit sworn to by a 
603  responsible officer of the insurer specifying the amount of 
604  direct premiums written in this state and number of 
605  policyholders or certificateholders. 
606         (c) The board of directors of an insurer shall hire the 
607  certified public accountant that prepares the audit required by 
608  this subsection and the board shall establish an audit committee 
609  of three or more directors of the insurer or an affiliated 
610  company. The audit committee shall be responsible for discussing 
611  audit findings and interacting with the certified public 
612  accountant with regard to her or his findings. The audit 
613  committee shall be comprised solely of members who are free from 
614  any relationship that, in the opinion of its board of directors, 
615  would interfere with the exercise of independent judgment as a 
616  committee member. The audit committee shall report to the board 
617  any findings of adverse financial conditions or significant 
618  deficiencies in internal controls that have been noted by the 
619  accountant. The insurer may request the office to waive this 
620  requirement of the audit committee membership based upon unusual 
621  hardship to the insurer. 
622         (d) An insurer may not use the same accountant or partner 
623  of an accounting firm responsible for preparing the report 
624  required by this subsection for more than 5 7 consecutive years. 
625  Following this period, the insurer may not use such accountant 
626  or partner for a period of 5 2 years, but may use another 
627  accountant or partner of the same firm. An insurer may request 
628  the office to waive this prohibition based upon an unusual 
629  hardship to the insurer and a determination that the accountant 
630  is exercising independent judgment that is not unduly influenced 
631  by the insurer considering such factors as the number of 
632  partners, expertise of the partners or the number of insurance 
633  clients of the accounting firm; the premium volume of the 
634  insurer; and the number of jurisdictions in which the insurer 
635  transacts business. 
636         (e) The commission shall adopt rules to implement this 
637  subsection, which rules must be in substantial conformity with 
638  the 1998 Model Rule Requiring Annual Audited Financial Reports 
639  adopted by the National Association of Insurance Commissioners 
640  or subsequent amendments, except where inconsistent with the 
641  requirements of this subsection. Any exception to, waiver of, or 
642  interpretation of accounting requirements of the commission must 
643  be in writing and signed by an authorized representative of the 
644  office. No insurer may raise as a defense in any action, any 
645  exception to, waiver of, or interpretation of accounting 
646  requirements, unless previously issued in writing by an 
647  authorized representative of the office. 
648         Section 7. Section 626.7452, Florida Statutes, is amended 
649  to read: 
650         626.7452 Managing general agents; examination authority. 
651  The acts of the managing general agent are considered to be the 
652  acts of the insurer on whose behalf it is acting. A managing 
653  general agent may be examined as if it were the insurer except 
654  in the case where the managing general agent solely represents a 
655  single domestic insurer. 
656         Section 8. Effective June 1, 2010, subsection (11) of 
657  section 626.854, Florida Statutes, is amended to read: 
658         626.854� “Public adjuster” defined; prohibitions.—The 
659  Legislature finds that it is necessary for the protection of the 
660  public to regulate public insurance adjusters and to prevent the 
661  unauthorized practice of law. 
662         (11)(a) If a public adjuster enters into a contract with an 
663  insured or claimant to reopen a claim or to file a supplemental 
664  claim that seeks additional payments for a claim that has been 
665  previously paid in part or in full or settled by the insurer, 
666  the public adjuster may not charge, agree to, or accept any 
667  compensation, payment, commission, fee, or other thing of value 
668  based on a previous settlement or previous claim payments by the 
669  insurer for the same cause of loss. The charge, compensation, 
670  payment, commission, fee, or other thing of value may be based 
671  only on the claim payments or settlement obtained through the 
672  work of the public adjuster after entering into the contract 
673  with the insured or claimant. Compensation for a reopened or 
674  supplemental claim may not exceed 20 percent of the reopened or 
675  supplemental claim payment. The contracts described in this 
676  paragraph are not subject to the limitations in paragraph (b). 
677         (b) A public adjuster may not charge, agree to, or accept 
678  any compensation, payment, commission, fee, or other thing of 
679  value in excess of: 
680         1. Ten percent of the amount of insurance claim payments by 
681  the insurer for claims based on events that are the subject of a 
682  declaration of a state of emergency by the Governor. This 
683  provision applies to claims made during the period of 1 year 
684  after the declaration of emergency. After the period of 1 year, 
685  the limitations in subparagraph 2. apply. 
686         2. Twenty percent of the amount of all other insurance 
687  claim payments by the insurer for claims that are not based on 
688  events that are the subject of a declaration of a state of 
689  emergency by the Governor. 
690 
691  The provisions of subsections (5)-(13) apply only to residential 
692  property insurance policies and condominium association policies 
693  as defined in s. 718.111(11). 
694         Section 9. Effective January 1, 2011, section 626.854, 
695  Florida Statutes, as amended by this act, is amended to read: 
696         626.854 “Public adjuster” defined; prohibitions.—The 
697  Legislature finds that it is necessary for the protection of the 
698  public to regulate public insurance adjusters and to prevent the 
699  unauthorized practice of law. 
700         (1) A “public adjuster” is any person, except a duly 
701  licensed attorney at law as hereinafter in s. 626.860 provided, 
702  who, for money, commission, or any other thing of value, 
703  prepares, completes, or files an insurance claim form for an 
704  insured or third-party claimant or who, for money, commission, 
705  or any other thing of value, acts or aids in any manner on 
706  behalf of an insured or third-party claimant in negotiating for 
707  or effecting the settlement of a claim or claims for loss or 
708  damage covered by an insurance contract or who advertises for 
709  employment as an adjuster of such claims, and also includes any 
710  person who, for money, commission, or any other thing of value, 
711  solicits, investigates, or adjusts such claims on behalf of any 
712  such public adjuster. 
713         (2) This definition does not apply to: 
714         (a) A licensed health care provider or employee thereof who 
715  prepares or files a health insurance claim form on behalf of a 
716  patient. 
717         (b) A person who files a health claim on behalf of another 
718  and does so without compensation. 
719         (3) A public adjuster may not give legal advice. A public 
720  adjuster may not act on behalf of or aid any person in 
721  negotiating or settling a claim relating to bodily injury, 
722  death, or noneconomic damages. 
723         (4) For purposes of this section, the term “insured” 
724  includes only the policyholder and any beneficiaries named or 
725  similarly identified in the policy. 
726         (5) A public adjuster may not directly or indirectly 
727  through any other person or entity solicit an insured or 
728  claimant by any means except on Monday through Saturday of each 
729  week and only between the hours of 8 a.m. and 8 p.m. on those 
730  days. 
731         (6) A public adjuster may not directly or indirectly 
732  through any other person or entity initiate contact or engage in 
733  face-to-face or telephonic solicitation or enter into a contract 
734  with any insured or claimant under an insurance policy until at 
735  least 48 hours after the occurrence of an event that may be the 
736  subject of a claim under the insurance policy unless contact is 
737  initiated by the insured or claimant. 
738         (7) An insured or claimant may cancel a public adjuster’s 
739  contract to adjust a claim without penalty or obligation within 
740  3 business days after the date on which the contract is executed 
741  or within 3 business days after the date on which the insured or 
742  claimant has notified the insurer of the claim, by phone or in 
743  writing, whichever is later. The public adjuster’s contract 
744  shall disclose to the insured or claimant his or her right to 
745  cancel the contract and advise the insured or claimant that 
746  notice of cancellation must be submitted in writing and sent by 
747  certified mail, return receipt requested, or other form of 
748  mailing which provides proof thereof, to the public adjuster at 
749  the address specified in the contract; provided, during any 
750  state of emergency as declared by the Governor and for a period 
751  of 1 year after the date of loss, the insured or claimant shall 
752  have 5 business days after the date on which the contract is 
753  executed to cancel a public adjuster’s contract. 
754         (8) It is an unfair and deceptive insurance trade practice 
755  pursuant to s. 626.9541 for a public adjuster or any other 
756  person to circulate or disseminate any advertisement, 
757  announcement, or statement containing any assertion, 
758  representation, or statement with respect to the business of 
759  insurance which is untrue, deceptive, or misleading. 
760         (a) For purposes of this section, the following statements, 
761  if made in any public adjuster’s advertisement or solicitation, 
762  shall be considered deceptive or misleading: 
763         1. A statement or representation that invites an insured 
764  policyholder to submit a claim when the policyholder does not 
765  have covered damage to insured property. 
766         2. Any statement or representation that invites an insured 
767  policyholder to submit a claim by offering monetary or other 
768  valuable inducement. 
769         3. A statement or representation that invites an insured 
770  policyholder to submit a claim by stating that there is “no 
771  risk” to the policyholder by submitting such claim. 
772         4. Any statement or representation, or use of a logo or 
773  shield, that would imply or could be mistakenly construed that 
774  the solicitation was issued or distributed by a governmental 
775  agency or is sanctioned or endorsed by a governmental agency. 
776         (b) For purposes of this paragraph, the term “written 
777  advertisement” includes only newspapers, magazines, flyers, and 
778  bulk mailers. The following disclaimer, which is not required to 
779  be printed on standard size business cards, shall be added in 
780  bold print and capital letters in typeface no smaller than the 
781  typeface of the body of the text to all written advertisements 
782  by any public adjuster: 
783         “THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD 
784         A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU 
785         ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU 
786         MAY DISREGARD THIS ADVERTISEMENT.” 
787         (9) A public adjuster, a public adjuster apprentice, or any 
788  person or entity acting on behalf of a public adjuster or public 
789  adjuster apprentice may not give or offer to give a monetary 
790  loan or advance to a client or prospective client. 
791         (10) A public adjuster, public adjuster apprentice, or any 
792  individual or entity acting on behalf of a public adjuster or 
793  public adjuster apprentice may not give or offer to give, 
794  directly or indirectly, any article of merchandise having a 
795  value in excess of $25 to any individual for the purpose of 
796  advertising or as an inducement to entering into a contract with 
797  a public adjuster. 
798         (11)(a) If a public adjuster enters into a contract with an 
799  insured or claimant to reopen a claim or to file a supplemental 
800  claim that seeks additional payments for a claim that has been 
801  previously paid in part or in full or settled by the insurer, 
802  the public adjuster may not charge, agree to, or accept any 
803  compensation, payment, commission, fee, or other thing of value 
804  based on a previous settlement or previous claim payments by the 
805  insurer for the same cause of loss. The charge, compensation, 
806  payment, commission, fee, or other thing of value may be based 
807  only on the claim payments or settlement obtained through the 
808  work of the public adjuster after entering into the contract 
809  with the insured or claimant. Compensation for a reopened or 
810  supplemental claim may not exceed 20 percent of the reopened or 
811  supplemental claim payment. The contracts described in this 
812  paragraph are not subject to the limitations in paragraph (b). 
813         (b) A public adjuster may not charge, agree to, or accept 
814  any compensation, payment, commission, fee, or other thing of 
815  value in excess of: 
816         1. Ten percent of the amount of insurance claim payments by 
817  the insurer for claims based on events that are the subject of a 
818  declaration of a state of emergency by the Governor. This 
819  provision applies to claims made during the period of 1 year 
820  after the declaration of emergency. After the period of 1 year, 
821  the limitations in subparagraph 2. apply. 
822         2. Twenty percent of the amount of insurance claim payments 
823  by the insurer for claims that are not based on events that are 
824  the subject of a declaration of a state of emergency by the 
825  Governor. 
826         (12) Each public adjuster shall provide to the claimant or 
827  insured a written estimate of the loss to assist in the 
828  submission of a proof of loss or any other claim for payment of 
829  insurance proceeds. The public adjuster shall retain such 
830  written estimate for at least 5 years and shall make such 
831  estimate available to the claimant or insured and the department 
832  upon request. 
833         (13) A public adjuster, public adjuster apprentice, or any 
834  person acting on behalf of a public adjuster or apprentice may 
835  not accept referrals of business from any person with whom the 
836  public adjuster conducts business if there is any form or manner 
837  of agreement to compensate the person, whether directly or 
838  indirectly, for referring business to the public adjuster. A 
839  public adjuster may not compensate any person, except for 
840  another public adjuster, whether directly or indirectly, for the 
841  principal purpose of referring business to the public adjuster. 
842         (14) A company employee adjuster, independent adjuster, 
843  attorney, investigator, or other persons acting on behalf of an 
844  insurer that needs access to an insured or claimant or to the 
845  insured property that is the subject of a claim shall provide at 
846  least 48 hours’ notice to the insured or claimant, public 
847  adjuster, or legal representative before scheduling a meeting 
848  with the claimant or an onsite inspection of the insured 
849  property. The insured or claimant may deny access to the 
850  property if this notice has not been provided. The insured or 
851  claimant may waive this 48-hour notice. 
852         (15)(a) A public adjuster shall ensure prompt notice of any 
853  property loss claim submitted to an insurer by or through a 
854  public adjuster or on which a public adjuster represents the 
855  insured at the time the claim or notice of loss is submitted to 
856  the insurer. The public adjuster shall ensure that notice is 
857  given to the insurer, the public adjuster’s contract is provided 
858  to the insurer, the property is made available for inspection of 
859  the loss or damage by the insurer, and the insurer is given an 
860  opportunity to interview the insured directly about the loss and 
861  claim. The insurer shall be allowed to obtain necessary 
862  information to investigate and respond to the claim. The insurer 
863  may not exclude the public adjuster from its in-person meetings 
864  with the insured. The insurer shall meet or communicate with the 
865  public adjuster in an effort to reach agreement as to the scope 
866  of the covered loss under the insurance policy. This section 
867  does not impair the terms and conditions of the insurance policy 
868  in effect at the time the claim is filed. 
869         (b) A public adjuster may not restrict or prevent an 
870  insurer, company employee adjuster, independent adjuster, 
871  attorney, investigator, or other person acting on behalf of the 
872  insurer from having reasonable access at reasonable times to any 
873  insured or claimant or to the insured property that is the 
874  subject of a claim. 
875         (c) A public adjuster may not act or fail to reasonably act 
876  in any manner that would obstruct or prevent an insurer or 
877  insurer’s adjuster from timely gaining access to conduct an 
878  inspection of any part of the insured property for which there 
879  is a claim for loss or damage to the property. The public 
880  adjuster that represents the insured may be present for the 
881  insurer’s inspection of the property loss or damage but, if the 
882  lack of availability of the public adjuster would otherwise 
883  delay the access to or the inspection of the insured property by 
884  the insurer, the public adjuster or the insured must allow the 
885  insurer to gain access to the insured property to facilitate the 
886  insurer’s prompt inspection of the loss or damage without the 
887  participation or presence of the public adjuster or insured. 
888         (16) A licensed contractor under part I of chapter 489, or 
889  a subcontractor, may not adjust a claim on behalf of an insured 
890  without being licensed and compliant as a public adjuster under 
891  this chapter. However, if asked by the residential property 
892  owner who has suffered loss or damage covered by a property 
893  insurance policy, or the insurer of such property, a licensed 
894  contractor may discuss or explain a bid for construction or 
895  repair of covered property if the contractor is doing so for 
896  usual and customary fees applicable to the work to be performed 
897  as stated in the contract between the contractor and the 
898  insured. 
899 
900  The provisions of subsections (5)-(16) (5)-(13) apply only to 
901  residential property insurance policies and condominium unit 
902  owner association policies as defined in s. 718.111(11). 
903         Section 10. Effective January 1, 2011, present subsections 
904  (7) through (11) of section 626.8651, Florida Statutes, are 
905  redesignated as subsections (8) through (12), respectively, and 
906  a new subsection (7) is added to that section, to read: 
907         626.8651 Public adjuster apprentice license; 
908  qualifications.— 
909         (7) A public adjuster apprentice shall complete a minimum 
910  of 8 hours of continuing education specific to the practice of a 
911  public adjuster, 2 hours of which must relate to ethics, in 
912  order to qualify for licensure as a public adjuster. The 
913  continuing education must be in subjects designed to inform the 
914  licensee regarding the current insurance laws of this state for 
915  the purpose of enabling him or her to engage in business as an 
916  insurance adjuster fairly and without injury to the public and 
917  to adjust all claims in accordance with the insurance contract 
918  and the laws of this state. 
919         Section 11. Effective January 1, 2011, section 626.8796, 
920  Florida Statutes, is amended to read: 
921         626.8796 Public adjuster contracts; fraud statement.— 
922         (1) All contracts for public adjuster services must be in 
923  writing and must prominently display the following statement on 
924  the contract: “Pursuant to s. 817.234, Florida Statutes, any 
925  person who, with the intent to injure, defraud, or deceive any 
926  insurer or insured, prepares, presents, or causes to be 
927  presented a proof of loss or estimate of cost or repair of 
928  damaged property in support of a claim under an insurance policy 
929  knowing that the proof of loss or estimate of claim or repairs 
930  contains any false, incomplete, or misleading information 
931  concerning any fact or thing material to the claim commits a 
932  felony of the third degree, punishable as provided in s. 
933  775.082, s. 775.083, or s. 775.084, Florida Statutes.” 
934         (2) A public adjuster contract must contain the following 
935  information: full name, permanent business address, and license 
936  number of the public adjuster, the full name of the public 
937  adjusting firm, and the insured’s full name and street address, 
938  together with a brief description of the loss. The contract must 
939  state the percentage of compensation for the public adjuster’s 
940  services, the type of claim, including an emergency claim, 
941  nonemergency claim, or supplemental claim, the signatures of the 
942  public adjuster and all named insureds, and the signature date. 
943  If all named insureds signatures are not available, the public 
944  adjuster shall submit an affidavit signed by the available named 
945  insureds attesting that they have authority to enter into the 
946  contract and to settle all claim issues on behalf of all named 
947  insureds. An unaltered copy of the executed contract must be 
948  remitted to the insurer within 30 days after execution. 
949         Section 12. Effective June 1, 2010, section 626.70132, 
950  Florida Statutes, is created to read: 
951         626.70132 Duty to file windstorm or hurricane claim.—A 
952  claim, supplemental claim, or reopened claim under an insurance 
953  policy that provides personal lines residential coverage, as 
954  defined in s. 627.4025, for loss or damage caused by the peril 
955  of windstorm or hurricane is barred unless notice of the claim, 
956  supplemental claim, or reopened claim was given to the insurer 
957  in accordance with the terms of the policy within 3 years after 
958  the hurricane first made landfall or the windstorm caused the 
959  covered damage. For purposes of this section, the term 
960  “supplemental claim” or “reopened claim” means any additional 
961  claim for recovery from the insurer for losses from the same 
962  hurricane or windstorm for which the insurer has previously 
963  adjusted pursuant to the initial claim. This section may not be 
964  interpreted to affect any applicable limitation on civil actions 
965  provided in s. 95.11 for claims, supplemental claims, or 
966  reopened claims timely filed under this section. 
967         Section 13. Section 627.0613, Florida Statutes, is amended 
968  to read: 
969         627.0613 Consumer advocate.—The Chief Financial Officer 
970  must appoint a consumer advocate who must represent the general 
971  public of the state before the department and the office. The 
972  consumer advocate must report directly to the Chief Financial 
973  Officer, but is not otherwise under the authority of the 
974  department or of any employee of the department. The consumer 
975  advocate has such powers as are necessary to carry out the 
976  duties of the office of consumer advocate, including, but not 
977  limited to, the powers to: 
978         (1) Recommend to the department or office, by petition, the 
979  commencement of any proceeding or action; appear in any 
980  proceeding or action before the department or office; or appear 
981  in any proceeding before the Division of Administrative Hearings 
982  relating to subject matter under the jurisdiction of the 
983  department or office. 
984         (2) Have access to and use of all files, records, and data 
985  of the department or office. 
986         (3) Examine rate and form filings submitted to the office, 
987  hire consultants as necessary to aid in the review process, and 
988  recommend to the department or office any position deemed by the 
989  consumer advocate to be in the public interest. 
990         (4) By June 1, 2012, and each June 1 thereafter, prepare an 
991  annual report card for each authorized personal residential 
992  property insurer, on a form and using a letter-grade scale 
993  developed by the commission by rule, which objectively grades 
994  each insurer based on the following factors: 
995         (a) The number and nature of valid consumer complaints, as 
996  a market share ratio, received by the department against the 
997  insurer. 
998         (b) The disposition of all valid consumer complaints 
999  received by the department. 
1000         (c) The average length of time for payment of claims by the 
1001  insurer. 
1002         (d) Any other measurable and objective factors the 
1003  commission identifies as capable of assisting policyholders in 
1004  making informed choices about homeowner’s insurance. 
1005 
1006  For purposes of this subsection, the term “valid consumer 
1007  complaint” means a written communication, or oral communication 
1008  that is subsequently converted to a written form, from a 
1009  consumer that expresses dissatisfaction involving a personal 
1010  residential insurance policy with a specific personal 
1011  residential property insurer. However, a valid complaint does 
1012  not arise if in the disposition thereof by the department the 
1013  insurer or agent position is upheld, the policy provision is 
1014  upheld, the coverage is explained, additional information is 
1015  provided, the complaint is withdrawn, the complaint is referred 
1016  outside the department, or if an inquiry has missing or 
1017  insufficient information, is not within the jurisdiction of the 
1018  department or requests mediation of a claim that is not eligible 
1019  for mediation. 
1020         (5) Prepare an annual budget for presentation to the 
1021  Legislature by the department, which budget must be adequate to 
1022  carry out the duties of the office of consumer advocate. 
1023         Section 14. Section 627.062, Florida Statutes, is amended 
1024  to read: 
1025         627.062 Rate standards.— 
1026         (1) The rates for all classes of insurance to which the 
1027  provisions of this part are applicable shall not be excessive, 
1028  inadequate, or unfairly discriminatory. 
1029         (2) As to all such classes of insurance: 
1030         (a) Insurers or rating organizations shall establish and 
1031  use rates, rating schedules, or rating manuals to allow the 
1032  insurer a reasonable rate of return on such classes of insurance 
1033  written in this state. A copy of rates, rating schedules, rating 
1034  manuals, premium credits or discount schedules, and surcharge 
1035  schedules, and changes thereto, shall be filed with the office 
1036  under one of the following procedures except as provided in 
1037  subparagraph 3.: 
1038         1. If the filing is made at least 90 days before the 
1039  proposed effective date and the filing is not implemented during 
1040  the office’s review of the filing and any proceeding and 
1041  judicial review, then such filing shall be considered a “file 
1042  and use” filing. In such case, the office shall finalize its 
1043  review by issuance of an approval a notice of intent to approve 
1044  or a notice of intent to disapprove within 90 days after receipt 
1045  of the filing. The approval notice of intent to approve and the 
1046  notice of intent to disapprove constitute agency action for 
1047  purposes of the Administrative Procedure Act. Requests for 
1048  supporting information, requests for mathematical or mechanical 
1049  corrections, or notification to the insurer by the office of its 
1050  preliminary findings shall not toll the 90-day period during any 
1051  such proceedings and subsequent judicial review. The rate shall 
1052  be deemed approved if the office does not issue an approval a 
1053  notice of intent to approve or a notice of intent to disapprove 
1054  within 90 days after receipt of the filing. 
1055         2. If the filing is not made in accordance with the 
1056  provisions of subparagraph 1., such filing shall be made as soon 
1057  as practicable, but no later than 30 days after the effective 
1058  date, and shall be considered a “use and file” filing. An 
1059  insurer making a “use and file” filing is potentially subject to 
1060  an order by the office to return to policyholders portions of 
1061  rates found to be excessive, as provided in paragraph (h). 
1062         3. For all property insurance filings made or submitted 
1063  after January 25, 2007, but before December 31, 2011 2010, an 
1064  insurer seeking a rate that is greater than the rate most 
1065  recently approved by the office shall make a “file and use” 
1066  filing. For purposes of this subparagraph, motor vehicle 
1067  collision and comprehensive coverages are not considered to be 
1068  property coverages. 
1069         (b) Upon receiving a rate filing, the office shall review 
1070  the rate filing to determine if a rate is excessive, inadequate, 
1071  or unfairly discriminatory. In making that determination, the 
1072  office shall, in accordance with generally accepted and 
1073  reasonable actuarial techniques, consider the following factors: 
1074         1. Past and prospective loss experience within and without 
1075  this state. 
1076         2. Past and prospective expenses. 
1077         3. The degree of competition among insurers for the risk 
1078  insured. 
1079         4. Investment income reasonably expected by the insurer, 
1080  consistent with the insurer’s investment practices, from 
1081  investable premiums anticipated in the filing, plus any other 
1082  expected income from currently invested assets representing the 
1083  amount expected on unearned premium reserves and loss reserves. 
1084  The commission may adopt rules using reasonable techniques of 
1085  actuarial science and economics to specify the manner in which 
1086  insurers shall calculate investment income attributable to such 
1087  classes of insurance written in this state and the manner in 
1088  which such investment income shall be used to calculate 
1089  insurance rates. Such manner shall contemplate allowances for an 
1090  underwriting profit factor and full consideration of investment 
1091  income which produce a reasonable rate of return; however, 
1092  investment income from invested surplus may not be considered. 
1093         5. The reasonableness of the judgment reflected in the 
1094  filing. 
1095         6. Dividends, savings, or unabsorbed premium deposits 
1096  allowed or returned to Florida policyholders, members, or 
1097  subscribers. 
1098         7. The adequacy of loss reserves. 
1099         8. The cost of reinsurance. The office shall not disapprove 
1100  a rate as excessive solely due to the insurer having obtained 
1101  catastrophic reinsurance to cover the insurer’s estimated 250 
1102  year probable maximum loss or any lower level of loss. 
1103         9. Trend factors, including trends in actual losses per 
1104  insured unit for the insurer making the filing. 
1105         10. Conflagration and catastrophe hazards, if applicable. 
1106         11. Projected hurricane losses, if applicable, which must 
1107  be estimated using a model or method found to be acceptable or 
1108  reliable by the Florida Commission on Hurricane Loss Projection 
1109  Methodology, and as further provided in s. 627.0628. 
1110         12. A reasonable margin for underwriting profit and 
1111  contingencies. 
1112         13. The cost of medical services, if applicable. 
1113         14. Other relevant factors which impact upon the frequency 
1114  or severity of claims or upon expenses. 
1115         (c) In the case of fire insurance rates, consideration 
1116  shall be given to the availability of water supplies and the 
1117  experience of the fire insurance business during a period of not 
1118  less than the most recent 5-year period for which such 
1119  experience is available. 
1120         (d) If conflagration or catastrophe hazards are given 
1121  consideration by an insurer in its rates or rating plan, 
1122  including surcharges and discounts, the insurer shall establish 
1123  a reserve for that portion of the premium allocated to such 
1124  hazard and shall maintain the premium in a catastrophe reserve. 
1125  Any removal of such premiums from the reserve for purposes other 
1126  than paying claims associated with a catastrophe or purchasing 
1127  reinsurance for catastrophes shall be subject to approval of the 
1128  office. Any ceding commission received by an insurer purchasing 
1129  reinsurance for catastrophes shall be placed in the catastrophe 
1130  reserve. 
1131         (e) After consideration of the rate factors provided in 
1132  paragraphs (b), (c), and (d), a rate may be found by the office 
1133  to be excessive, inadequate, or unfairly discriminatory based 
1134  upon the following standards: 
1135         1. Rates shall be deemed excessive if they are likely to 
1136  produce a profit from Florida business that is unreasonably high 
1137  in relation to the risk involved in the class of business or if 
1138  expenses are unreasonably high in relation to services rendered. 
1139         2. Rates shall be deemed excessive if, among other things, 
1140  the rate structure established by a stock insurance company 
1141  provides for replenishment of surpluses from premiums, when the 
1142  replenishment is attributable to investment losses. 
1143         3. Rates shall be deemed inadequate if they are clearly 
1144  insufficient, together with the investment income attributable 
1145  to them, to sustain projected losses and expenses in the class 
1146  of business to which they apply. 
1147         4. A rating plan, including discounts, credits, or 
1148  surcharges, shall be deemed unfairly discriminatory if it fails 
1149  to clearly and equitably reflect consideration of the 
1150  policyholder’s participation in a risk management program 
1151  adopted pursuant to s. 627.0625. 
1152         5. A rate shall be deemed inadequate as to the premium 
1153  charged to a risk or group of risks if discounts or credits are 
1154  allowed which exceed a reasonable reflection of expense savings 
1155  and reasonably expected loss experience from the risk or group 
1156  of risks. 
1157         6. A rate shall be deemed unfairly discriminatory as to a 
1158  risk or group of risks if the application of premium discounts, 
1159  credits, or surcharges among such risks does not bear a 
1160  reasonable relationship to the expected loss and expense 
1161  experience among the various risks. 
1162         (f) In reviewing a rate filing, the office may require the 
1163  insurer to provide at the insurer’s expense all information 
1164  necessary to evaluate the condition of the company and the 
1165  reasonableness of the filing according to the criteria 
1166  enumerated in this section. 
1167         (g) The office may at any time review a rate, rating 
1168  schedule, rating manual, or rate change; the pertinent records 
1169  of the insurer; and market conditions. If the office finds on a 
1170  preliminary basis that a rate may be excessive, inadequate, or 
1171  unfairly discriminatory, the office shall initiate proceedings 
1172  to disapprove the rate and shall so notify the insurer. However, 
1173  the office may not disapprove as excessive any rate for which it 
1174  has given final approval or which has been deemed approved for a 
1175  period of 1 year after the effective date of the filing unless 
1176  the office finds that a material misrepresentation or material 
1177  error was made by the insurer or was contained in the filing. 
1178  Upon being so notified, the insurer or rating organization 
1179  shall, within 60 days, file with the office all information 
1180  which, in the belief of the insurer or organization, proves the 
1181  reasonableness, adequacy, and fairness of the rate or rate 
1182  change. The office shall issue a notice of intent to approve or 
1183  a notice of intent to disapprove pursuant to the procedures of 
1184  paragraph (a) within 90 days after receipt of the insurer’s 
1185  initial response. In such instances and in any administrative 
1186  proceeding relating to the legality of the rate, the insurer or 
1187  rating organization shall carry the burden of proof by a 
1188  preponderance of the evidence to show that the rate is not 
1189  excessive, inadequate, or unfairly discriminatory. After the 
1190  office notifies an insurer that a rate may be excessive, 
1191  inadequate, or unfairly discriminatory, unless the office 
1192  withdraws the notification, the insurer shall not alter the rate 
1193  except to conform with the office’s notice until the earlier of 
1194  120 days after the date the notification was provided or 180 
1195  days after the date of the implementation of the rate. The 
1196  office may, subject to chapter 120, disapprove without the 60 
1197  day notification any rate increase filed by an insurer within 
1198  the prohibited time period or during the time that the legality 
1199  of the increased rate is being contested. 
1200         (h) If In the event the office finds that a rate or rate 
1201  change is excessive, inadequate, or unfairly discriminatory, the 
1202  office shall issue an order of disapproval specifying that a new 
1203  rate or rate schedule which responds to the findings of the 
1204  office be filed by the insurer. The office shall further order, 
1205  for any “use and file” filing made in accordance with 
1206  subparagraph (a)2., that premiums charged each policyholder 
1207  constituting the portion of the rate above that which was 
1208  actuarially justified be returned to such policyholder in the 
1209  form of a credit or refund. If the office finds that an 
1210  insurer’s rate or rate change is inadequate, the new rate or 
1211  rate schedule filed with the office in response to such a 
1212  finding shall be applicable only to new or renewal business of 
1213  the insurer written on or after the effective date of the 
1214  responsive filing. 
1215         (i)1. Except as otherwise specifically provided in this 
1216  chapter, the office shall not, directly or indirectly, prohibit 
1217  any insurer, including any residual market plan or joint 
1218  underwriting association, from paying acquisition costs based on 
1219  the full amount of premium, as defined in s. 627.403, applicable 
1220  to any policy, or directly or indirectly prohibit any such 
1221  insurer from including the full amount of acquisition costs in a 
1222  rate filing. 
1223         2. The office shall not, directly or indirectly, impede, 
1224  abridge, or otherwise compromise an insurer’s right to acquire 
1225  policyholders, advertise, or appoint agents, including the 
1226  calculation, manner, or amount of such agent commissions, if 
1227  any. 
1228         (j) With respect to residential property insurance rate 
1229  filings, the rate filing must account for mitigation measures 
1230  undertaken by policyholders to reduce hurricane losses. 
1231         (k)1.a. An insurer may make a separate filing limited 
1232  solely to an adjustment of its rates for reinsurance, the cost 
1233  of financing products used as a replacement for reinsurance, or 
1234  financing costs incurred in the purchase of reinsurance, and an 
1235  inflation trend factor published by the office pursuant to 
1236  subparagraph 4. If an insurer chooses to make a separate filing 
1237  under this paragraph, it must implement the rate in such a 
1238  manner that all rate increases implemented as a result of the 
1239  separate filing, together with rate increases associated with 
1240  any other rate filing, do or financing products to replace or 
1241  finance the payment of the amount covered by the Temporary 
1242  Increase in Coverage Limits (TICL) portion of the Florida 
1243  Hurricane Catastrophe Fund including replacement reinsurance for 
1244  the TICL reductions made pursuant to s. 215.555(17)(e); the 
1245  actual cost paid due to the application of the TICL premium 
1246  factor pursuant to s. 215.555(17)(f); and the actual cost paid 
1247  due to the application of the cash build-up factor pursuant to 
1248  s. 215.555(5)(b) if the insurer: 
1249         a. Elects to purchase financing products such as a 
1250  liquidity instrument or line of credit, in which case the cost 
1251  included in the filing for the liquidity instrument or line of 
1252  credit may not result in a premium increase exceeding 3 percent 
1253  for any individual policyholder. All costs contained in the 
1254  filing may not result in an overall premium increase of more 
1255  than 10 percent for any individual policyholder, excluding 
1256  coverage changes and surcharges, within the same policy year. 
1257         b. An insurer that makes a filing relating to reinsurance 
1258  or financing products must include the following Includes in the 
1259  filing: a copy of all of its reinsurance, liquidity instrument, 
1260  or line of credit contracts; proof of the billing or payment for 
1261  the contracts; and the calculation upon which the proposed rate 
1262  change is based demonstrating demonstrates that the costs meet 
1263  the criteria of this section and are not loaded for expenses or 
1264  profit for the insurer making the filing. 
1265         c. Any filing made pursuant this paragraph may include only 
1266  the Includes no other changes to its rates which are expressly 
1267  authorized by this paragraph in the filing. 
1268         d. Has not implemented a rate increase within the 6 months 
1269  immediately preceding the filing. 
1270         e. Does not file for a rate increase under any other 
1271  paragraph within 6 months after making a filing under this 
1272  paragraph. 
1273         d.f. An insurer that purchases reinsurance or financing 
1274  products from an affiliated company may make a filing pursuant 
1275  to in compliance with this paragraph does so only if the costs 
1276  for such reinsurance or financing products are charged at or 
1277  below charges made for comparable coverage by nonaffiliated 
1278  reinsurers or financial entities making such coverage or 
1279  financing products available in this state. 
1280         e. An insurer that makes a filing as the result of a change 
1281  in an inflation trend factor published by the office need 
1282  support that filing only with rates and rating examples and an 
1283  explanation demonstrating the insurer’s eligibility to adopt the 
1284  inflation trend factor. 
1285         2. An insurer may only make only one filing in any 12-month 
1286  period under this paragraph. 
1287         3. An insurer that elects to implement a rate change under 
1288  this paragraph must file its rate filing with the office at 
1289  least 45 days before the effective date of the rate change. 
1290  After an insurer submits a complete filing that meets all of the 
1291  requirements of this paragraph, the office has 45 days after the 
1292  date of the filing to review the rate filing and determine if 
1293  the rate is excessive, inadequate, or unfairly discriminatory. 
1294         4. Beginning January 1, 2011, the office shall publish an 
1295  annual informational memorandum to establish one or more 
1296  inflation trend factors that may be stated separately for 
1297  personal and residential property and for building coverage, 
1298  contents coverage, additional living expense coverage, and 
1299  liability coverage, if applicable. These factors shall represent 
1300  an estimate of cost increases or decreases based upon publicly 
1301  available relevant data and economic indices that are identified 
1302  in the memorandum. Such factors are exempt from the rulemaking 
1303  requirements of chapter 120, and insurers are not required to 
1304  adopt the factors. The office may publish factors for any line 
1305  of insurance, but is required to publish a factor only for 
1306  residential property insurance. 
1307 
1308  The provisions of this subsection do shall not apply to workers’ 
1309  compensation and employer’s liability insurance and to motor 
1310  vehicle insurance. 
1311         (3)(a) For individual risks that are not rated in 
1312  accordance with the insurer’s rates, rating schedules, rating 
1313  manuals, and underwriting rules filed with the office and which 
1314  have been submitted to the insurer for individual rating, the 
1315  insurer must maintain documentation on each risk subject to 
1316  individual risk rating. The documentation must identify the 
1317  named insured and specify the characteristics and classification 
1318  of the risk supporting the reason for the risk being 
1319  individually risk rated, including any modifications to existing 
1320  approved forms to be used on the risk. The insurer must maintain 
1321  these records for a period of at least 5 years after the 
1322  effective date of the policy. 
1323         (b) Individual risk rates and modifications to existing 
1324  approved forms are not subject to this part or part II, except 
1325  for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404, 
1326  627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132, 
1327  627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426, 
1328  627.4265, 627.427, and 627.428, but are subject to all other 
1329  applicable provisions of this code and rules adopted thereunder. 
1330         (c) This subsection does not apply to private passenger 
1331  motor vehicle insurance. 
1332         (4)(a) Contingent on specific appropriations made to 
1333  implement this subsection, in order to enhance the ability of 
1334  consumers to compare premiums and to increase the accuracy and 
1335  usefulness of rate and product comparison information for 
1336  homeowners’ insurance, the office shall develop or contract with 
1337  a private entity to develop a comprehensive program for 
1338  providing the consumer with all available information necessary 
1339  to make an informed purchase of the insurance product that best 
1340  serves the needs of the individual. 
1341         (b) In developing the comprehensive program, the office 
1342  shall rely as much as is practical on information that is 
1343  currently available and shall consider: 
1344         1. The most efficient means for developing, hosting, and 
1345  operating a separate website that consolidates all consumer 
1346  information for price comparisons, filed complaints, financial 
1347  strength, underwriting, and receivership information and other 
1348  data useful to consumers; 
1349         2. Whether all admitted insurers should be required to 
1350  submit additional information to populate the composite website 
1351  and how often such submissions must be made; 
1352         3. Whether all admitted insurers should be required to 
1353  provide links from the website into each individual insurer’s 
1354  website in order to enable consumers to access product rate 
1355  information and apply for quotations; 
1356         4. Developing a plan to publicize the existence, 
1357  availability, and value of the website; and 
1358         5. Any other provision that would make relevant homeowners’ 
1359  insurance information more readily available so that consumers 
1360  can make informed product comparisons and purchasing decisions. 
1361         (c) Before establishing the program or website, the office 
1362  shall conduct a cost-benefit analysis to determine the most 
1363  effective approach for establishing and operating the program 
1364  and website. Based on the results of the analysis, the office 
1365  shall submit a proposed implementation plan for review and 
1366  approval by the Financial Services Commission. The 
1367  implementation plan shall include an estimated timeline for 
1368  establishing the program and website; a description of the data 
1369  and functionality to be provided by the site, a strategy for 
1370  publicizing the website to consumers; a recommended approach for 
1371  developing, hosting, and operating the website; and an estimate 
1372  of all major nonrecurring and recurring costs required to 
1373  establish and operate the website. Upon approval of the plan, 
1374  the office may initiate the establishment of the program. 
1375         (5)(4) The establishment of any rate, rating 
1376  classification, rating plan or schedule, or variation thereof in 
1377  violation of part IX of chapter 626 is also in violation of this 
1378  section. In order to enhance the ability of consumers to compare 
1379  premiums and to increase the accuracy and usefulness of rate 
1380  comparison information provided by the office to the public, the 
1381  office shall develop a proposed standard rating territory plan 
1382  to be used by all authorized property and casualty insurers for 
1383  residential property insurance. In adopting the proposed plan, 
1384  the office may consider geographical characteristics relevant to 
1385  risk, county lines, major roadways, existing rating territories 
1386  used by a significant segment of the market, and other relevant 
1387  factors. Such plan shall be submitted to the President of the 
1388  Senate and the Speaker of the House of Representatives by 
1389  January 15, 2006. The plan may not be implemented unless 
1390  authorized by further act of the Legislature. 
1391         (6)(5) With respect to a rate filing involving coverage of 
1392  the type for which the insurer is required to pay a 
1393  reimbursement premium to the Florida Hurricane Catastrophe Fund, 
1394  the insurer may fully recoup in its property insurance premiums 
1395  any reimbursement premiums paid to the Florida Hurricane 
1396  Catastrophe Fund, together with reasonable costs of other 
1397  reinsurance, but except as otherwise provided in this section, 
1398  may not recoup reinsurance costs that duplicate coverage 
1399  provided by the Florida Hurricane Catastrophe Fund. An insurer 
1400  may not recoup more than 1 year of reimbursement premium at a 
1401  time. Any under-recoupment from the prior year may be added to 
1402  the following year’s reimbursement premium, and any over 
1403  recoupment shall be subtracted from the following year’s 
1404  reimbursement premium. 
1405         (7)(6)(a) If an insurer requests an administrative hearing 
1406  pursuant to s. 120.57 related to a rate filing under this 
1407  section, the director of the Division of Administrative Hearings 
1408  shall expedite the hearing and assign an administrative law 
1409  judge who shall commence the hearing within 30 days after the 
1410  receipt of the formal request and shall enter a recommended 
1411  order within 30 days after the hearing or within 30 days after 
1412  receipt of the hearing transcript by the administrative law 
1413  judge, whichever is later. Each party shall be allowed 10 days 
1414  in which to submit written exceptions to the recommended order. 
1415  The office shall enter a final order within 30 days after the 
1416  entry of the recommended order. The provisions of this paragraph 
1417  may be waived upon stipulation of all parties. 
1418         (b) Upon entry of a final order, the insurer may request a 
1419  expedited appellate review pursuant to the Florida Rules of 
1420  Appellate Procedure. It is the intent of the Legislature that 
1421  the First District Court of Appeal grant an insurer’s request 
1422  for an expedited appellate review. 
1423         (8)(7)(a) The provisions of this subsection apply only with 
1424  respect to rates for medical malpractice insurance and shall 
1425  control to the extent of any conflict with other provisions of 
1426  this section. 
1427         (b) Any portion of a judgment entered or settlement paid as 
1428  a result of a statutory or common-law bad faith action and any 
1429  portion of a judgment entered which awards punitive damages 
1430  against an insurer may not be included in the insurer’s rate 
1431  base, and shall not be used to justify a rate or rate change. 
1432  Any common-law bad faith action identified as such, any portion 
1433  of a settlement entered as a result of a statutory or common-law 
1434  action, or any portion of a settlement wherein an insurer agrees 
1435  to pay specific punitive damages may not be used to justify a 
1436  rate or rate change. The portion of the taxable costs and 
1437  attorney’s fees which is identified as being related to the bad 
1438  faith and punitive damages in these judgments and settlements 
1439  may not be included in the insurer’s rate base and may not be 
1440  used utilized to justify a rate or rate change. 
1441         (c) Upon reviewing a rate filing and determining whether 
1442  the rate is excessive, inadequate, or unfairly discriminatory, 
1443  the office shall consider, in accordance with generally accepted 
1444  and reasonable actuarial techniques, past and present 
1445  prospective loss experience, either using loss experience solely 
1446  for this state or giving greater credibility to this state’s 
1447  loss data after applying actuarially sound methods of assigning 
1448  credibility to such data. 
1449         (d) Rates shall be deemed excessive if, among other 
1450  standards established by this section, the rate structure 
1451  provides for replenishment of reserves or surpluses from 
1452  premiums when the replenishment is attributable to investment 
1453  losses. 
1454         (e) The insurer must apply a discount or surcharge based on 
1455  the health care provider’s loss experience or shall establish an 
1456  alternative method giving due consideration to the provider’s 
1457  loss experience. The insurer must include in the filing a copy 
1458  of the surcharge or discount schedule or a description of the 
1459  alternative method used, and must provide a copy of such 
1460  schedule or description, as approved by the office, to 
1461  policyholders at the time of renewal and to prospective 
1462  policyholders at the time of application for coverage. 
1463         (f) Each medical malpractice insurer must make a rate 
1464  filing under this section, sworn to by at least two executive 
1465  officers of the insurer, at least once each calendar year. 
1466         (8)(a)1. No later than 60 days after the effective date of 
1467  medical malpractice legislation enacted during the 2003 Special 
1468  Session D of the Florida Legislature, the office shall calculate 
1469  a presumed factor that reflects the impact that the changes 
1470  contained in such legislation will have on rates for medical 
1471  malpractice insurance and shall issue a notice informing all 
1472  insurers writing medical malpractice coverage of such presumed 
1473  factor. In determining the presumed factor, the office shall use 
1474  generally accepted actuarial techniques and standards provided 
1475  in this section in determining the expected impact on losses, 
1476  expenses, and investment income of the insurer. To the extent 
1477  that the operation of a provision of medical malpractice 
1478  legislation enacted during the 2003 Special Session D of the 
1479  Florida Legislature is stayed pending a constitutional 
1480  challenge, the impact of that provision shall not be included in 
1481  the calculation of a presumed factor under this subparagraph. 
1482         2. No later than 60 days after the office issues its notice 
1483  of the presumed rate change factor under subparagraph 1., each 
1484  insurer writing medical malpractice coverage in this state shall 
1485  submit to the office a rate filing for medical malpractice 
1486  insurance, which will take effect no later than January 1, 2004, 
1487  and apply retroactively to policies issued or renewed on or 
1488  after the effective date of medical malpractice legislation 
1489  enacted during the 2003 Special Session D of the Florida 
1490  Legislature. Except as authorized under paragraph (b), the 
1491  filing shall reflect an overall rate reduction at least as great 
1492  as the presumed factor determined under subparagraph 1. With 
1493  respect to policies issued on or after the effective date of 
1494  such legislation and prior to the effective date of the rate 
1495  filing required by this subsection, the office shall order the 
1496  insurer to make a refund of the amount that was charged in 
1497  excess of the rate that is approved. 
1498         (b) Any insurer or rating organization that contends that 
1499  the rate provided for in paragraph (a) is excessive, inadequate, 
1500  or unfairly discriminatory shall separately state in its filing 
1501  the rate it contends is appropriate and shall state with 
1502  specificity the factors or data that it contends should be 
1503  considered in order to produce such appropriate rate. The 
1504  insurer or rating organization shall be permitted to use all of 
1505  the generally accepted actuarial techniques provided in this 
1506  section in making any filing pursuant to this subsection. The 
1507  office shall review each such exception and approve or 
1508  disapprove it prior to use. It shall be the insurer’s burden to 
1509  actuarially justify any deviations from the rates required to be 
1510  filed under paragraph (a). The insurer making a filing under 
1511  this paragraph shall include in the filing the expected impact 
1512  of medical malpractice legislation enacted during the 2003 
1513  Special Session D of the Florida Legislature on losses, 
1514  expenses, and rates. 
1515         (c) If any provision of medical malpractice legislation 
1516  enacted during the 2003 Special Session D of the Florida 
1517  Legislature is held invalid by a court of competent 
1518  jurisdiction, the office shall permit an adjustment of all 
1519  medical malpractice rates filed under this section to reflect 
1520  the impact of such holding on such rates so as to ensure that 
1521  the rates are not excessive, inadequate, or unfairly 
1522  discriminatory. 
1523         (d) Rates approved on or before July 1, 2003, for medical 
1524  malpractice insurance shall remain in effect until the effective 
1525  date of a new rate filing approved under this subsection. 
1526         (e) The calculation and notice by the office of the 
1527  presumed factor pursuant to paragraph (a) is not an order or 
1528  rule that is subject to chapter 120. If the office enters into a 
1529  contract with an independent consultant to assist the office in 
1530  calculating the presumed factor, such contract shall not be 
1531  subject to the competitive solicitation requirements of s. 
1532  287.057. 
1533         (9)(a) The chief executive officer or chief financial 
1534  officer of a property insurer and the chief actuary of a 
1535  property insurer must certify under oath and subject to the 
1536  penalty of perjury, on a form approved by the commission, the 
1537  following information, which must accompany a rate filing: 
1538         1. The signing officer and actuary have reviewed the rate 
1539  filing; 
1540         2. Based on the signing officer’s and actuary’s knowledge, 
1541  the rate filing does not contain any untrue statement of a 
1542  material fact or omit to state a material fact necessary in 
1543  order to make the statements made, in light of the circumstances 
1544  under which such statements were made, not misleading; 
1545         3. Based on the signing officer’s and actuary’s knowledge, 
1546  the information and other factors described in paragraph (2)(b), 
1547  including, but not limited to, investment income, fairly present 
1548  in all material respects the basis of the rate filing for the 
1549  periods presented in the filing; and 
1550         4. Based on the signing officer’s and actuary’s knowledge, 
1551  the rate filing reflects all premium savings that are reasonably 
1552  expected to result from legislative enactments and are in 
1553  accordance with generally accepted and reasonable actuarial 
1554  techniques. 
1555         (b) A signing officer or actuary knowingly making a false 
1556  certification under this subsection commits a violation of s. 
1557  626.9541(1)(e) and is subject to the penalties under s. 
1558  626.9521. 
1559         (c) Failure to provide such certification by the officer 
1560  and actuary shall result in the rate filing being disapproved 
1561  without prejudice to be refiled. 
1562         (d) A certification made pursuant to paragraph (a) is not 
1563  rendered false if, after making the subject rate filing, the 
1564  insurer provides the office with additional or supplementary 
1565  information pursuant to a formal or informal request from the 
1566  office. 
1567         (e)(d) The commission may adopt rules and forms pursuant to 
1568  ss. 120.536(1) and 120.54 to administer this subsection. 
1569         (10) The burden is on the office to establish that rates 
1570  are excessive for personal lines residential coverage with a 
1571  dwelling replacement cost of $1 million or more or for a single 
1572  condominium unit with a combined dwelling and contents 
1573  replacement cost of $1 million or more. Upon request of the 
1574  office, the insurer shall provide to the office such loss and 
1575  expense information as the office reasonably needs to meet this 
1576  burden. 
1577         (11) Any interest paid pursuant to s. 627.70131(5) may not 
1578  be included in the insurer’s rate base and may not be used to 
1579  justify a rate or rate change. 
1580         Section 15. Section 627.0629, Florida Statutes, is amended 
1581  to read: 
1582         627.0629 Residential property insurance; rate filings.— 
1583         (1)(a) It is the intent of the Legislature that insurers 
1584  must provide the most accurate pricing signals available savings 
1585  to encourage consumers to who install or implement windstorm 
1586  damage mitigation techniques, alterations, or solutions to their 
1587  properties to prevent windstorm losses. It is also the intent of 
1588  the Legislature that implementation of mitigation discounts not 
1589  result in a loss of income to the insurers granting the 
1590  discounts, so that the aggregate of mitigation discounts should 
1591  not exceed the aggregate of the expected reduction in loss that 
1592  is attributable to the mitigation efforts for which discounts 
1593  are granted. A rate filing for residential property insurance 
1594  must include actuarially reasonable discounts, credits, debits, 
1595  or other rate differentials, or appropriate reductions in 
1596  deductibles, which provide the proper pricing for all 
1597  properties. The rate filing must take into account the presence 
1598  or absence of on which fixtures or construction techniques 
1599  demonstrated to reduce the amount of loss in a windstorm have 
1600  been installed or implemented. The fixtures or construction 
1601  techniques shall include, but not be limited to, fixtures or 
1602  construction techniques that which enhance roof strength, roof 
1603  covering performance, roof-to-wall strength, wall-to-floor-to 
1604  foundation strength, opening protection, and window, door, and 
1605  skylight strength. Credits, debits, discounts, or other rate 
1606  differentials, or appropriate reductions or increases in 
1607  deductibles, which recognize the presence or absence of for 
1608  fixtures and construction techniques that which meet the minimum 
1609  requirements of the Florida Building Code must be included in 
1610  the rate filing. If an insurer demonstrates that the aggregate 
1611  of its mitigation discounts results in a reduction to revenue 
1612  which exceeds the reduction of the aggregate loss that is 
1613  expected to result from the mitigation, that insurer may recover 
1614  the lost revenue through an increase in its base rates. All 
1615  insurance companies must make a rate filing which includes the 
1616  credits, discounts, or other rate differentials or reductions in 
1617  deductibles by February 28, 2003. By July 1, 2007, the office 
1618  shall reevaluate the discounts, credits, other rate 
1619  differentials, and appropriate reductions in deductibles for 
1620  fixtures and construction techniques that meet the minimum 
1621  requirements of the Florida Building Code, based upon actual 
1622  experience or any other loss relativity studies available to the 
1623  office. The office shall determine the discounts, credits, 
1624  debits, other rate differentials, and appropriate reductions or 
1625  increases in deductibles that reflect the full actuarial value 
1626  of such revaluation, which may be used by insurers in rate 
1627  filings. 
1628         (b) By February 1, 2011, the Office of Insurance 
1629  Regulation, in consultation with the Department of Financial 
1630  Services and the Department of Community Affairs, shall develop 
1631  and make publicly available a proposed method for insurers to 
1632  establish discounts, credits, or other rate differentials for 
1633  hurricane mitigation measures which directly correlate to the 
1634  numerical rating assigned to a structure pursuant to the uniform 
1635  home grading scale adopted by the Financial Services Commission 
1636  pursuant to s. 215.55865, including any proposed changes to the 
1637  uniform home grading scale. By October 1, 2011, the commission 
1638  shall adopt rules requiring insurers to make rate filings for 
1639  residential property insurance which revise insurers’ discounts, 
1640  credits, or other rate differentials for hurricane mitigation 
1641  measures so that such rate differentials correlate directly to 
1642  the uniform home grading scale. The rules may include such 
1643  changes to the uniform home grading scale as the commission 
1644  determines are necessary, and may specify the minimum required 
1645  discounts, credits, or other rate differentials. Such rate 
1646  differentials must be consistent with generally accepted 
1647  actuarial principles and wind-loss mitigation studies. The rules 
1648  shall allow a period of at least 2 years after the effective 
1649  date of the revised mitigation discounts, credits, or other rate 
1650  differentials for a property owner to obtain an inspection or 
1651  otherwise qualify for the revised credit, during which time the 
1652  insurer shall continue to apply the mitigation credit that was 
1653  applied immediately prior to the effective date of the revised 
1654  credit. Discounts, credits, and other rate differentials 
1655  established for rate filings under this paragraph shall 
1656  supersede, after adoption, the discounts, credits, and other 
1657  rate differentials included in rate filings under paragraph (a). 
1658         (2)(a) A rate filing for residential property insurance 
1659  made on or before the implementation of paragraph (b) may 
1660  include rate factors that reflect the manner in which building 
1661  code enforcement in a particular jurisdiction addresses the risk 
1662  of wind damage.; However, such a rate filing must also provide 
1663  for variations from such rate factors on an individual basis 
1664  based on an inspection of a particular structure by a licensed 
1665  home inspector, which inspection may be at the cost of the 
1666  insured. 
1667         (b) A rate filing for residential property insurance made 
1668  more than 150 days after approval by the office of a building 
1669  code rating factor plan submitted by a statewide rating 
1670  organization shall include positive and negative rate factors 
1671  that reflect the manner in which building code enforcement in a 
1672  particular jurisdiction addresses risk of wind damage. The rate 
1673  filing shall include variations from standard rate factors on an 
1674  individual basis based on inspection of a particular structure 
1675  by a licensed home inspector. If an inspection is requested by 
1676  the insured, the insurer may require the insured to pay the 
1677  reasonable cost of the inspection. This paragraph applies to 
1678  structures constructed or renovated after the implementation of 
1679  this paragraph. 
1680         (c) The premium notice shall specify the amount by which 
1681  the rate has been adjusted as a result of this subsection and 
1682  shall also specify the maximum possible positive and negative 
1683  adjustments that are approved for use by the insurer under this 
1684  subsection. 
1685         (3) A rate filing made on or after July 1, 1995, for mobile 
1686  home owner’s insurance must include appropriate discounts, 
1687  credits, or other rate differentials for mobile homes 
1688  constructed to comply with American Society of Civil Engineers 
1689  Standard ANSI/ASCE 7-88, adopted by the United States Department 
1690  of Housing and Urban Development on July 13, 1994, and that also 
1691  comply with all applicable tie-down requirements provided by 
1692  state law. 
1693         (4) The Legislature finds that separate consideration and 
1694  notice of hurricane insurance premiums will assist consumers by 
1695  providing greater assurance that hurricane premiums are lawful 
1696  and by providing more complete information regarding the 
1697  components of property insurance premiums. Effective January 1, 
1698  1997, A rate filing for residential property insurance shall be 
1699  separated into two components, rates for hurricane coverage and 
1700  rates for all other coverages. A premium notice reflecting a 
1701  rate implemented on the basis of such a filing shall separately 
1702  indicate the premium for hurricane coverage and the premium for 
1703  all other coverages. 
1704         (5) In order to provide an appropriate transition period, 
1705  an insurer may, in its sole discretion, implement an approved 
1706  rate filing for residential property insurance over a period of 
1707  years. An insurer electing to phase in its rate filing must 
1708  provide an informational notice to the office setting out its 
1709  schedule for implementation of the phased-in rate filing. An 
1710  insurer may include in its rate the actual cost of private 
1711  market reinsurance that corresponds to available coverage of the 
1712  Temporary Increase in Coverage Limits, TICL, from the Florida 
1713  Hurricane Catastrophe Fund. The insurer may also include the 
1714  cost of reinsurance to replace the TICL reduction implemented 
1715  pursuant to s. 215.555(17)(d)9. However, this cost for 
1716  reinsurance may not include any expense or profit load or result 
1717  in a total annual base rate increase in excess of 10 percent. 
1718         (6) Any rate filing that is based in whole or part on data 
1719  from a computer model may not exceed 15 percent unless there is 
1720  a public hearing. 
1721         (7) An insurer may implement appropriate discounts or other 
1722  rate differentials of up to 10 percent of the annual premium to 
1723  mobile home owners who provide to the insurer evidence of a 
1724  current inspection of tie-downs for the mobile home, certifying 
1725  that the tie-downs have been properly installed and are in good 
1726  condition. 
1727         (8) EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL 
1728  SOUNDNESS.— 
1729         (a) It is the intent of the Legislature to provide a 
1730  program whereby homeowners may obtain an evaluation of the wind 
1731  resistance of their homes with respect to preventing damage from 
1732  hurricanes, together with a recommendation of reasonable steps 
1733  that may be taken to upgrade their homes to better withstand 
1734  hurricane force winds. 
1735         (b) To the extent that funds are provided for this purpose 
1736  in the General Appropriations Act, the Legislature hereby 
1737  authorizes the establishment of a program to be administered by 
1738  the Citizens Property Insurance Corporation for homeowners 
1739  insured in the high-risk account. 
1740         (c) The program shall provide grants to homeowners, for the 
1741  purpose of providing homeowner applicants with funds to conduct 
1742  an evaluation of the integrity of their homes with respect to 
1743  withstanding hurricane force winds, recommendations to retrofit 
1744  the homes to better withstand damage from such winds, and the 
1745  estimated cost to make the recommended retrofits. 
1746         (d) The Department of Community Affairs shall establish by 
1747  rule standards to govern the quality of the evaluation, the 
1748  quality of the recommendations for retrofitting, the eligibility 
1749  of the persons conducting the evaluation, and the selection of 
1750  applicants under the program. In establishing the rule, the 
1751  Department of Community Affairs shall consult with the advisory 
1752  committee to minimize the possibility of fraud or abuse in the 
1753  evaluation and retrofitting process, and to ensure that funds 
1754  spent by homeowners acting on the recommendations achieve 
1755  positive results. 
1756         (e) The Citizens Property Insurance Corporation shall 
1757  identify areas of this state with the greatest wind risk to 
1758  residential properties and recommend annually to the Department 
1759  of Community Affairs priority target areas for such evaluations 
1760  and inclusion with the associated residential construction 
1761  mitigation program. 
1762         (9) A property insurance rate filing that includes any 
1763  adjustments related to premiums paid to the Florida Hurricane 
1764  Catastrophe Fund must include a complete calculation of the 
1765  insurer’s catastrophe load, and the information in the filing 
1766  may not be limited solely to recovery of moneys paid to the 
1767  fund. 
1768         Section 16. Paragraphs (b), (c), (d), and (y) of subsection 
1769  (6) of section 627.351, Florida Statutes, are amended to read: 
1770         627.351 Insurance risk apportionment plans.— 
1771         (6) CITIZENS PROPERTY INSURANCE CORPORATION.— 
1772         (b)1. All insurers authorized to write one or more subject 
1773  lines of business in this state are subject to assessment by the 
1774  corporation and, for the purposes of this subsection, are 
1775  referred to collectively as “assessable insurers.” Insurers 
1776  writing one or more subject lines of business in this state 
1777  pursuant to part VIII of chapter 626 are not assessable 
1778  insurers, but insureds who procure one or more subject lines of 
1779  business in this state pursuant to part VIII of chapter 626 are 
1780  subject to assessment by the corporation and are referred to 
1781  collectively as “assessable insureds.” An authorized insurer’s 
1782  assessment liability begins shall begin on the first day of the 
1783  calendar year following the year in which the insurer was issued 
1784  a certificate of authority to transact insurance for subject 
1785  lines of business in this state and terminates shall terminate 1 
1786  year after the end of the first calendar year during which the 
1787  insurer no longer holds a certificate of authority to transact 
1788  insurance for subject lines of business in this state. 
1789         2.a. All revenues, assets, liabilities, losses, and 
1790  expenses of the corporation are shall be divided into three 
1791  separate accounts as follows: 
1792         (I) A personal lines account for personal residential 
1793  policies issued by the corporation or issued by the Residential 
1794  Property and Casualty Joint Underwriting Association and renewed 
1795  by the corporation which provides that provide comprehensive, 
1796  multiperil coverage on risks that are not located in areas 
1797  eligible for coverage in the Florida Windstorm Underwriting 
1798  Association as those areas were defined on January 1, 2002, and 
1799  for such policies that do not provide coverage for the peril of 
1800  wind on risks that are located in such areas; 
1801         (II) A commercial lines account for commercial residential 
1802  and commercial nonresidential policies issued by the corporation 
1803  or issued by the Residential Property and Casualty Joint 
1804  Underwriting Association and renewed by the corporation which 
1805  that provide coverage for basic property perils on risks which 
1806  that are not located in areas eligible for coverage in the 
1807  Florida Windstorm Underwriting Association as those areas were 
1808  defined on January 1, 2002, and for such policies that do not 
1809  provide coverage for the peril of wind on risks that are located 
1810  in such areas; and 
1811         (III) A coastal high-risk account for personal residential 
1812  policies and commercial residential and commercial 
1813  nonresidential property policies issued by the corporation or 
1814  transferred to the corporation which provides that provide 
1815  coverage for the peril of wind on risks that are located in 
1816  areas eligible for coverage in the Florida Windstorm 
1817  Underwriting Association as those areas were defined on January 
1818  1, 2002. The corporation may offer policies that provide 
1819  multiperil coverage and the corporation shall continue to offer 
1820  policies that provide coverage only for the peril of wind for 
1821  risks located in areas eligible for coverage in the coastal 
1822  high-risk account. In issuing multiperil coverage, the 
1823  corporation may use its approved policy forms and rates for the 
1824  personal lines account. An applicant or insured who is eligible 
1825  to purchase a multiperil policy from the corporation may 
1826  purchase a multiperil policy from an authorized insurer without 
1827  prejudice to the applicant’s or insured’s eligibility to 
1828  prospectively purchase a policy that provides coverage only for 
1829  the peril of wind from the corporation. An applicant or insured 
1830  who is eligible for a corporation policy that provides coverage 
1831  only for the peril of wind may elect to purchase or retain such 
1832  policy and also purchase or retain coverage excluding wind from 
1833  an authorized insurer without prejudice to the applicant’s or 
1834  insured’s eligibility to prospectively purchase a policy that 
1835  provides multiperil coverage from the corporation. It is the 
1836  goal of the Legislature that there would be an overall average 
1837  savings of 10 percent or more for a policyholder who currently 
1838  has a wind-only policy with the corporation, and an ex-wind 
1839  policy with a voluntary insurer or the corporation, and who then 
1840  obtains a multiperil policy from the corporation. It is the 
1841  intent of the Legislature that the offer of multiperil coverage 
1842  in the coastal high-risk account be made and implemented in a 
1843  manner that does not adversely affect the tax-exempt status of 
1844  the corporation or creditworthiness of or security for currently 
1845  outstanding financing obligations or credit facilities of the 
1846  coastal high-risk account, the personal lines account, or the 
1847  commercial lines account. The coastal high-risk account must 
1848  also include quota share primary insurance under subparagraph 
1849  (c)2. The area eligible for coverage under the coastal high-risk 
1850  account also includes the area within Port Canaveral, which is 
1851  bordered on the south by the City of Cape Canaveral, bordered on 
1852  the west by the Banana River, and bordered on the north by 
1853  Federal Government property. 
1854         b. The three separate accounts must be maintained as long 
1855  as financing obligations entered into by the Florida Windstorm 
1856  Underwriting Association or Residential Property and Casualty 
1857  Joint Underwriting Association are outstanding, in accordance 
1858  with the terms of the corresponding financing documents. If When 
1859  the financing obligations are no longer outstanding, in 
1860  accordance with the terms of the corresponding financing 
1861  documents, the corporation may use a single account for all 
1862  revenues, assets, liabilities, losses, and expenses of the 
1863  corporation. Consistent with the requirement of this 
1864  subparagraph and prudent investment policies that minimize the 
1865  cost of carrying debt, the board shall exercise its best efforts 
1866  to retire existing debt or to obtain approval of necessary 
1867  parties to amend the terms of existing debt, so as to structure 
1868  the most efficient plan to consolidate the three separate 
1869  accounts into a single account. By February 1, 2007, the board 
1870  shall submit a report to the Financial Services Commission, the 
1871  President of the Senate, and the Speaker of the House of 
1872  Representatives which includes an analysis of consolidating the 
1873  accounts, the actions the board has taken to minimize the cost 
1874  of carrying debt, and its recommendations for executing the most 
1875  efficient plan. 
1876         c. Creditors of the Residential Property and Casualty Joint 
1877  Underwriting Association and of the accounts specified in sub 
1878  sub-subparagraphs a.(I) and (II) may have a claim against, and 
1879  recourse to, the accounts referred to in sub-sub-subparagraphs 
1880  a.(I) and (II) and shall have no claim against, or recourse to, 
1881  the account referred to in sub-sub-subparagraph a.(III). 
1882  Creditors of the Florida Windstorm Underwriting Association 
1883  shall have a claim against, and recourse to, the account 
1884  referred to in sub-sub-subparagraph a.(III) and shall have no 
1885  claim against, or recourse to, the accounts referred to in sub 
1886  sub-subparagraphs a.(I) and (II). 
1887         d. Revenues, assets, liabilities, losses, and expenses not 
1888  attributable to particular accounts shall be prorated among the 
1889  accounts. 
1890         e. The Legislature finds that the revenues of the 
1891  corporation are revenues that are necessary to meet the 
1892  requirements set forth in documents authorizing the issuance of 
1893  bonds under this subsection. 
1894         f. No part of the income of the corporation may inure to 
1895  the benefit of any private person. 
1896         3. With respect to a deficit in an account: 
1897         a. After accounting for the Citizens policyholder surcharge 
1898  imposed under sub-subparagraph i., if when the remaining 
1899  projected deficit incurred in a particular calendar year is not 
1900  greater than 6 percent of the aggregate statewide direct written 
1901  premium for the subject lines of business for the prior calendar 
1902  year, the entire deficit shall be recovered through regular 
1903  assessments of assessable insurers under paragraph (p) and 
1904  assessable insureds. 
1905         b. After accounting for the Citizens policyholder surcharge 
1906  imposed under sub-subparagraph i., when the remaining projected 
1907  deficit incurred in a particular calendar year exceeds 6 percent 
1908  of the aggregate statewide direct written premium for the 
1909  subject lines of business for the prior calendar year, the 
1910  corporation shall levy regular assessments on assessable 
1911  insurers under paragraph (q) (p) and on assessable insureds in 
1912  an amount equal to the greater of 6 percent of the deficit or 6 
1913  percent of the aggregate statewide direct written premium for 
1914  the subject lines of business for the prior calendar year. Any 
1915  remaining deficit shall be recovered through emergency 
1916  assessments under sub-subparagraph d. 
1917         c. Each assessable insurer’s share of the amount being 
1918  assessed under sub-subparagraph a. or sub-subparagraph b. must 
1919  shall be in the proportion that the assessable insurer’s direct 
1920  written premium for the subject lines of business for the year 
1921  preceding the assessment bears to the aggregate statewide direct 
1922  written premium for the subject lines of business for that year. 
1923  The assessment percentage applicable to each assessable insured 
1924  is the ratio of the amount being assessed under sub-subparagraph 
1925  a. or sub-subparagraph b. to the aggregate statewide direct 
1926  written premium for the subject lines of business for the prior 
1927  year. Assessments levied by the corporation on assessable 
1928  insurers under sub-subparagraphs a. and b. shall be paid as 
1929  required by the corporation’s plan of operation and paragraph 
1930  (q) (p). Assessments levied by the corporation on assessable 
1931  insureds under sub-subparagraphs a. and b. shall be collected by 
1932  the surplus lines agent at the time the surplus lines agent 
1933  collects the surplus lines tax required by s. 626.932 and shall 
1934  be paid to the Florida Surplus Lines Service Office at the time 
1935  the surplus lines agent pays the surplus lines tax to the 
1936  Florida Surplus Lines Service Office. Upon receipt of regular 
1937  assessments from surplus lines agents, the Florida Surplus Lines 
1938  Service Office shall transfer the assessments directly to the 
1939  corporation as determined by the corporation. 
1940         d. Upon a determination by the board of governors that a 
1941  deficit in an account exceeds the amount that will be recovered 
1942  through regular assessments under sub-subparagraph a. or sub 
1943  subparagraph b., plus the amount that is expected to be 
1944  recovered through surcharges under sub-subparagraph i., as to 
1945  the remaining projected deficit the board shall levy, after 
1946  verification by the office, emergency assessments, for as many 
1947  years as necessary to cover the deficits, to be collected by 
1948  assessable insurers and the corporation and collected from 
1949  assessable insureds upon issuance or renewal of policies for 
1950  subject lines of business, excluding National Flood Insurance 
1951  policies. The amount of the emergency assessment collected in a 
1952  particular year shall be a uniform percentage of that year’s 
1953  direct written premium for subject lines of business and all 
1954  accounts of the corporation, excluding National Flood Insurance 
1955  Program policy premiums, as annually determined by the board and 
1956  verified by the office. The office shall verify the arithmetic 
1957  calculations involved in the board’s determination within 30 
1958  days after receipt of the information on which the determination 
1959  was based. Notwithstanding any other provision of law, the 
1960  corporation and each assessable insurer that writes subject 
1961  lines of business shall collect emergency assessments from its 
1962  policyholders without such obligation being affected by any 
1963  credit, limitation, exemption, or deferment. Emergency 
1964  assessments levied by the corporation on assessable insureds 
1965  shall be collected by the surplus lines agent at the time the 
1966  surplus lines agent collects the surplus lines tax required by 
1967  s. 626.932 and shall be paid to the Florida Surplus Lines 
1968  Service Office at the time the surplus lines agent pays the 
1969  surplus lines tax to the Florida Surplus Lines Service Office. 
1970  The emergency assessments so collected shall be transferred 
1971  directly to the corporation on a periodic basis as determined by 
1972  the corporation and shall be held by the corporation solely in 
1973  the applicable account. The aggregate amount of emergency 
1974  assessments levied for an account under this sub-subparagraph in 
1975  any calendar year may, at the discretion of the board of 
1976  governors, be less than but may not exceed the greater of 10 
1977  percent of the amount needed to cover the deficit, plus 
1978  interest, fees, commissions, required reserves, and other costs 
1979  associated with financing of the original deficit, or 10 percent 
1980  of the aggregate statewide direct written premium for subject 
1981  lines of business and for all accounts of the corporation for 
1982  the prior year, plus interest, fees, commissions, required 
1983  reserves, and other costs associated with financing the deficit. 
1984         e. The corporation may pledge the proceeds of assessments, 
1985  projected recoveries from the Florida Hurricane Catastrophe 
1986  Fund, other insurance and reinsurance recoverables, policyholder 
1987  surcharges and other surcharges, and other funds available to 
1988  the corporation as the source of revenue for and to secure bonds 
1989  issued under paragraph (p), bonds or other indebtedness issued 
1990  under subparagraph (c)3., or lines of credit or other financing 
1991  mechanisms issued or created under this subsection, or to retire 
1992  any other debt incurred as a result of deficits or events giving 
1993  rise to deficits, or in any other way that the board determines 
1994  will efficiently recover such deficits. The purpose of the lines 
1995  of credit or other financing mechanisms is to provide additional 
1996  resources to assist the corporation in covering claims and 
1997  expenses attributable to a catastrophe. As used in this 
1998  subsection, the term “assessments” includes regular assessments 
1999  under sub-subparagraph a., sub-subparagraph b., or subparagraph 
2000  (p)1. and emergency assessments under sub-subparagraph d. 
2001  Emergency assessments collected under sub-subparagraph d. are 
2002  not part of an insurer’s rates, are not premium, and are not 
2003  subject to premium tax, fees, or commissions; however, failure 
2004  to pay the emergency assessment shall be treated as failure to 
2005  pay premium. The emergency assessments under sub-subparagraph d. 
2006  shall continue as long as any bonds issued or other indebtedness 
2007  incurred with respect to a deficit for which the assessment was 
2008  imposed remain outstanding, unless adequate provision has been 
2009  made for the payment of such bonds or other indebtedness 
2010  pursuant to the documents governing such bonds or other 
2011  indebtedness. 
2012         f. As used in this subsection for purposes of any deficit 
2013  incurred on or after January 25, 2007, the term “subject lines 
2014  of business” means insurance written by assessable insurers or 
2015  procured by assessable insureds for all property and casualty 
2016  lines of business in this state, but not including workers’ 
2017  compensation or medical malpractice. As used in the sub 
2018  subparagraph, the term “property and casualty lines of business” 
2019  includes all lines of business identified on Form 2, Exhibit of 
2020  Premiums and Losses, in the annual statement required of 
2021  authorized insurers by s. 624.424 and any rule adopted under 
2022  this section, except for those lines identified as accident and 
2023  health insurance and except for policies written under the 
2024  National Flood Insurance Program or the Federal Crop Insurance 
2025  Program. For purposes of this sub-subparagraph, the term 
2026  “workers’ compensation” includes both workers’ compensation 
2027  insurance and excess workers’ compensation insurance. 
2028         g. The Florida Surplus Lines Service Office shall determine 
2029  annually the aggregate statewide written premium in subject 
2030  lines of business procured by assessable insureds and shall 
2031  report that information to the corporation in a form and at a 
2032  time the corporation specifies to ensure that the corporation 
2033  can meet the requirements of this subsection and the 
2034  corporation’s financing obligations. 
2035         h. The Florida Surplus Lines Service Office shall verify 
2036  the proper application by surplus lines agents of assessment 
2037  percentages for regular assessments and emergency assessments 
2038  levied under this subparagraph on assessable insureds and shall 
2039  assist the corporation in ensuring the accurate, timely 
2040  collection and payment of assessments by surplus lines agents as 
2041  required by the corporation. 
2042         i.(I) If a deficit is incurred in any account in 2008 or 
2043  thereafter, the board of governors shall levy a Citizens 
2044  policyholder surcharge against all policyholders of the 
2045  corporation. for a 12-month period, which 
2046         (II) The Citizens policyholder surcharge shall be levied 
2047  collected at the time of issuance or renewal of a policy, as a 
2048  uniform percentage of the premium for the policy of up to 15 
2049  percent of such premium, which funds shall be used to offset the 
2050  deficit. 
2051         (III) The Citizens policyholder surcharge is payable upon 
2052  cancellation or termination of the policy, upon renewal of the 
2053  policy, or upon issuance of a new policy by Citizens within the 
2054  first 12 months after the date of the levy or the period of time 
2055  necessary to fully collect the Citizens policyholder surcharge 
2056  amount. 
2057         (IV) The corporation may not levy any regular assessments 
2058  under paragraph (q) pursuant to sub-subparagraph a. or sub 
2059  subparagraph b. with respect to a particular year’s deficit 
2060  until the corporation has first levied a Citizens policyholder 
2061  surcharge under this sub-subparagraph in the full amount 
2062  authorized by this sub-subparagraph. 
2063         (V) Citizens policyholder surcharges under this sub 
2064  subparagraph are not considered premium and are not subject to 
2065  commissions, fees, or premium taxes. However, failure to pay 
2066  such surcharges shall be treated as failure to pay premium. 
2067         j. If the amount of any assessments or surcharges collected 
2068  from corporation policyholders, assessable insurers or their 
2069  policyholders, or assessable insureds exceeds the amount of the 
2070  deficits, such excess amounts shall be remitted to and retained 
2071  by the corporation in a reserve to be used by the corporation, 
2072  as determined by the board of governors and approved by the 
2073  office, to pay claims or reduce any past, present, or future 
2074  plan-year deficits or to reduce outstanding debt. 
2075         (c) The plan of operation of the corporation: 
2076         1. Must provide for adoption of residential property and 
2077  casualty insurance policy forms and commercial residential and 
2078  nonresidential property insurance forms, which forms must be 
2079  approved by the office prior to use. The corporation shall adopt 
2080  the following policy forms: 
2081         a. Standard personal lines policy forms that are 
2082  comprehensive multiperil policies providing full coverage of a 
2083  residential property equivalent to the coverage provided in the 
2084  private insurance market under an HO-3, HO-4, or HO-6 policy. 
2085         b. Basic personal lines policy forms that are policies 
2086  similar to an HO-8 policy or a dwelling fire policy that provide 
2087  coverage meeting the requirements of the secondary mortgage 
2088  market, but which coverage is more limited than the coverage 
2089  under a standard policy. 
2090         c. Commercial lines residential and nonresidential policy 
2091  forms that are generally similar to the basic perils of full 
2092  coverage obtainable for commercial residential structures and 
2093  commercial nonresidential structures in the admitted voluntary 
2094  market. 
2095         d. Personal lines and commercial lines residential property 
2096  insurance forms that cover the peril of wind only. The forms are 
2097  applicable only to residential properties located in areas 
2098  eligible for coverage under the coastal high-risk account 
2099  referred to in sub-subparagraph (b)2.a. 
2100         e. Commercial lines nonresidential property insurance forms 
2101  that cover the peril of wind only. The forms are applicable only 
2102  to nonresidential properties located in areas eligible for 
2103  coverage under the coastal high-risk account referred to in sub 
2104  subparagraph (b)2.a. 
2105         f. The corporation may adopt variations of the policy forms 
2106  listed in sub-subparagraphs a.-e. that contain more restrictive 
2107  coverage. 
2108         2.a. Must provide that the corporation adopt a program in 
2109  which the corporation and authorized insurers enter into quota 
2110  share primary insurance agreements for hurricane coverage, as 
2111  defined in s. 627.4025(2)(a), for eligible risks, and adopt 
2112  property insurance forms for eligible risks which cover the 
2113  peril of wind only. As used in this subsection, the term: 
2114         (I) “Quota share primary insurance” means an arrangement in 
2115  which the primary hurricane coverage of an eligible risk is 
2116  provided in specified percentages by the corporation and an 
2117  authorized insurer. The corporation and authorized insurer are 
2118  each solely responsible for a specified percentage of hurricane 
2119  coverage of an eligible risk as set forth in a quota share 
2120  primary insurance agreement between the corporation and an 
2121  authorized insurer and the insurance contract. The 
2122  responsibility of the corporation or authorized insurer to pay 
2123  its specified percentage of hurricane losses of an eligible 
2124  risk, as set forth in the quota share primary insurance 
2125  agreement, may not be altered by the inability of the other 
2126  party to the agreement to pay its specified percentage of 
2127  hurricane losses. Eligible risks that are provided hurricane 
2128  coverage through a quota share primary insurance arrangement 
2129  must be provided policy forms that set forth the obligations of 
2130  the corporation and authorized insurer under the arrangement, 
2131  clearly specify the percentages of quota share primary insurance 
2132  provided by the corporation and authorized insurer, and 
2133  conspicuously and clearly state that neither the authorized 
2134  insurer nor the corporation may be held responsible beyond its 
2135  specified percentage of coverage of hurricane losses. 
2136         (II) “Eligible risks” means personal lines residential and 
2137  commercial lines residential risks that meet the underwriting 
2138  criteria of the corporation and are located in areas that were 
2139  eligible for coverage by the Florida Windstorm Underwriting 
2140  Association on January 1, 2002. 
2141         b. The corporation may enter into quota share primary 
2142  insurance agreements with authorized insurers at corporation 
2143  coverage levels of 90 percent and 50 percent. 
2144         c. If the corporation determines that additional coverage 
2145  levels are necessary to maximize participation in quota share 
2146  primary insurance agreements by authorized insurers, the 
2147  corporation may establish additional coverage levels. However, 
2148  the corporation’s quota share primary insurance coverage level 
2149  may not exceed 90 percent. 
2150         d. Any quota share primary insurance agreement entered into 
2151  between an authorized insurer and the corporation must provide 
2152  for a uniform specified percentage of coverage of hurricane 
2153  losses, by county or territory as set forth by the corporation 
2154  board, for all eligible risks of the authorized insurer covered 
2155  under the quota share primary insurance agreement. 
2156         e. Any quota share primary insurance agreement entered into 
2157  between an authorized insurer and the corporation is subject to 
2158  review and approval by the office. However, such agreement shall 
2159  be authorized only as to insurance contracts entered into 
2160  between an authorized insurer and an insured who is already 
2161  insured by the corporation for wind coverage. 
2162         f. For all eligible risks covered under quota share primary 
2163  insurance agreements, the exposure and coverage levels for both 
2164  the corporation and authorized insurers shall be reported by the 
2165  corporation to the Florida Hurricane Catastrophe Fund. For all 
2166  policies of eligible risks covered under quota share primary 
2167  insurance agreements, the corporation and the authorized insurer 
2168  shall maintain complete and accurate records for the purpose of 
2169  exposure and loss reimbursement audits as required by Florida 
2170  Hurricane Catastrophe Fund rules. The corporation and the 
2171  authorized insurer shall each maintain duplicate copies of 
2172  policy declaration pages and supporting claims documents. 
2173         g. The corporation board shall establish in its plan of 
2174  operation standards for quota share agreements which ensure that 
2175  there is no discriminatory application among insurers as to the 
2176  terms of quota share agreements, pricing of quota share 
2177  agreements, incentive provisions if any, and consideration paid 
2178  for servicing policies or adjusting claims. 
2179         h. The quota share primary insurance agreement between the 
2180  corporation and an authorized insurer must set forth the 
2181  specific terms under which coverage is provided, including, but 
2182  not limited to, the sale and servicing of policies issued under 
2183  the agreement by the insurance agent of the authorized insurer 
2184  producing the business, the reporting of information concerning 
2185  eligible risks, the payment of premium to the corporation, and 
2186  arrangements for the adjustment and payment of hurricane claims 
2187  incurred on eligible risks by the claims adjuster and personnel 
2188  of the authorized insurer. Entering into a quota sharing 
2189  insurance agreement between the corporation and an authorized 
2190  insurer shall be voluntary and at the discretion of the 
2191  authorized insurer. 
2192         3. May provide that the corporation may employ or otherwise 
2193  contract with individuals or other entities to provide 
2194  administrative or professional services that may be appropriate 
2195  to effectuate the plan. The corporation shall have the power to 
2196  borrow funds, by issuing bonds or by incurring other 
2197  indebtedness, and shall have other powers reasonably necessary 
2198  to effectuate the requirements of this subsection, including, 
2199  without limitation, the power to issue bonds and incur other 
2200  indebtedness in order to refinance outstanding bonds or other 
2201  indebtedness. The corporation may, but is not required to, seek 
2202  judicial validation of its bonds or other indebtedness under 
2203  chapter 75. The corporation may issue bonds or incur other 
2204  indebtedness, or have bonds issued on its behalf by a unit of 
2205  local government pursuant to subparagraph (p)2., in the absence 
2206  of a hurricane or other weather-related event, upon a 
2207  determination by the corporation, subject to approval by the 
2208  office, that such action would enable it to efficiently meet the 
2209  financial obligations of the corporation and that such 
2210  financings are reasonably necessary to effectuate the 
2211  requirements of this subsection. The corporation is authorized 
2212  to take all actions needed to facilitate tax-free status for any 
2213  such bonds or indebtedness, including formation of trusts or 
2214  other affiliated entities. The corporation shall have the 
2215  authority to pledge assessments, projected recoveries from the 
2216  Florida Hurricane Catastrophe Fund, other reinsurance 
2217  recoverables, market equalization and other surcharges, and 
2218  other funds available to the corporation as security for bonds 
2219  or other indebtedness. In recognition of s. 10, Art. I of the 
2220  State Constitution, prohibiting the impairment of obligations of 
2221  contracts, it is the intent of the Legislature that no action be 
2222  taken whose purpose is to impair any bond indenture or financing 
2223  agreement or any revenue source committed by contract to such 
2224  bond or other indebtedness. 
2225         4.a. Must require that the corporation operate subject to 
2226  the supervision and approval of a board of governors consisting 
2227  of eight individuals who are residents of this state, from 
2228  different geographical areas of this state. The Governor, the 
2229  Chief Financial Officer, the President of the Senate, and the 
2230  Speaker of the House of Representatives shall each appoint two 
2231  members of the board. At least one of the two members appointed 
2232  by each appointing officer must have demonstrated expertise in 
2233  insurance, and is deemed to be within the scope of the exemption 
2234  provided in s. 112.313(7)(b). The Chief Financial Officer shall 
2235  designate one of the appointees as chair. All board members 
2236  serve at the pleasure of the appointing officer. All members of 
2237  the board of governors are subject to removal at will by the 
2238  officers who appointed them. All board members, including the 
2239  chair, must be appointed to serve for 3-year terms beginning 
2240  annually on a date designated by the plan. However, for the 
2241  first term beginning on or after July 1, 2009, each appointing 
2242  officer shall appoint one member of the board for a 2-year term 
2243  and one member for a 3-year term. Any board vacancy shall be 
2244  filled for the unexpired term by the appointing officer. The 
2245  Chief Financial Officer shall appoint a technical advisory group 
2246  to provide information and advice to the board of governors in 
2247  connection with the board’s duties under this subsection. The 
2248  executive director and senior managers of the corporation shall 
2249  be engaged by the board and serve at the pleasure of the board. 
2250  Any executive director appointed on or after July 1, 2006, is 
2251  subject to confirmation by the Senate. The executive director is 
2252  responsible for employing other staff as the corporation may 
2253  require, subject to review and concurrence by the board. 
2254         b. The board shall create a Market Accountability Advisory 
2255  Committee to assist the corporation in developing awareness of 
2256  its rates and its customer and agent service levels in 
2257  relationship to the voluntary market insurers writing similar 
2258  coverage. The members of the advisory committee shall consist of 
2259  the following 11 persons, one of whom must be elected chair by 
2260  the members of the committee: four representatives, one 
2261  appointed by the Florida Association of Insurance Agents, one by 
2262  the Florida Association of Insurance and Financial Advisors, one 
2263  by the Professional Insurance Agents of Florida, and one by the 
2264  Latin American Association of Insurance Agencies; three 
2265  representatives appointed by the insurers with the three highest 
2266  voluntary market share of residential property insurance 
2267  business in the state; one representative from the Office of 
2268  Insurance Regulation; one consumer appointed by the board who is 
2269  insured by the corporation at the time of appointment to the 
2270  committee; one representative appointed by the Florida 
2271  Association of Realtors; and one representative appointed by the 
2272  Florida Bankers Association. All members must serve for 3-year 
2273  terms and may serve for consecutive terms. The committee shall 
2274  report to the corporation at each board meeting on insurance 
2275  market issues which may include rates and rate competition with 
2276  the voluntary market; service, including policy issuance, claims 
2277  processing, and general responsiveness to policyholders, 
2278  applicants, and agents; and matters relating to depopulation. 
2279         5. Must provide a procedure for determining the eligibility 
2280  of a risk for coverage, as follows: 
2281         a. Subject to the provisions of s. 627.3517, with respect 
2282  to personal lines residential risks, if the risk is offered 
2283  coverage from an authorized insurer at the insurer’s approved 
2284  rate under either a standard policy including wind coverage or, 
2285  if consistent with the insurer’s underwriting rules as filed 
2286  with the office, a basic policy including wind coverage, for a 
2287  new application to the corporation for coverage, the risk is not 
2288  eligible for any policy issued by the corporation unless the 
2289  premium for coverage from the authorized insurer is more than 15 
2290  percent greater than the premium for comparable coverage from 
2291  the corporation. If the risk is not able to obtain any such 
2292  offer, the risk is eligible for either a standard policy 
2293  including wind coverage or a basic policy including wind 
2294  coverage issued by the corporation; however, if the risk could 
2295  not be insured under a standard policy including wind coverage 
2296  regardless of market conditions, the risk shall be eligible for 
2297  a basic policy including wind coverage unless rejected under 
2298  subparagraph 8. However, with regard to a policyholder of the 
2299  corporation or a policyholder removed from the corporation 
2300  through an assumption agreement until the end of the assumption 
2301  period, the policyholder remains eligible for coverage from the 
2302  corporation regardless of any offer of coverage from an 
2303  authorized insurer or surplus lines insurer. The corporation 
2304  shall determine the type of policy to be provided on the basis 
2305  of objective standards specified in the underwriting manual and 
2306  based on generally accepted underwriting practices. 
2307         (I) If the risk accepts an offer of coverage through the 
2308  market assistance plan or an offer of coverage through a 
2309  mechanism established by the corporation before a policy is 
2310  issued to the risk by the corporation or during the first 30 
2311  days of coverage by the corporation, and the producing agent who 
2312  submitted the application to the plan or to the corporation is 
2313  not currently appointed by the insurer, the insurer shall: 
2314         (A) Pay to the producing agent of record of the policy, for 
2315  the first year, an amount that is the greater of the insurer’s 
2316  usual and customary commission for the type of policy written or 
2317  a fee equal to the usual and customary commission of the 
2318  corporation; or 
2319         (B) Offer to allow the producing agent of record of the 
2320  policy to continue servicing the policy for a period of not less 
2321  than 1 year and offer to pay the agent the greater of the 
2322  insurer’s or the corporation’s usual and customary commission 
2323  for the type of policy written. 
2324 
2325  If the producing agent is unwilling or unable to accept 
2326  appointment, the new insurer shall pay the agent in accordance 
2327  with sub-sub-sub-subparagraph (A). 
2328         (II) When the corporation enters into a contractual 
2329  agreement for a take-out plan, the producing agent of record of 
2330  the corporation policy is entitled to retain any unearned 
2331  commission on the policy, and the insurer shall: 
2332         (A) Pay to the producing agent of record of the corporation 
2333  policy, for the first year, an amount that is the greater of the 
2334  insurer’s usual and customary commission for the type of policy 
2335  written or a fee equal to the usual and customary commission of 
2336  the corporation; or 
2337         (B) Offer to allow the producing agent of record of the 
2338  corporation policy to continue servicing the policy for a period 
2339  of not less than 1 year and offer to pay the agent the greater 
2340  of the insurer’s or the corporation’s usual and customary 
2341  commission for the type of policy written. 
2342 
2343  If the producing agent is unwilling or unable to accept 
2344  appointment, the new insurer shall pay the agent in accordance 
2345  with sub-sub-sub-subparagraph (A). 
2346         b. With respect to commercial lines residential risks, for 
2347  a new application to the corporation for coverage, if the risk 
2348  is offered coverage under a policy including wind coverage from 
2349  an authorized insurer at its approved rate, the risk is not 
2350  eligible for any policy issued by the corporation unless the 
2351  premium for coverage from the authorized insurer is more than 15 
2352  percent greater than the premium for comparable coverage from 
2353  the corporation. If the risk is not able to obtain any such 
2354  offer, the risk is eligible for a policy including wind coverage 
2355  issued by the corporation. However, with regard to a 
2356  policyholder of the corporation or a policyholder removed from 
2357  the corporation through an assumption agreement until the end of 
2358  the assumption period, the policyholder remains eligible for 
2359  coverage from the corporation regardless of any offer of 
2360  coverage from an authorized insurer or surplus lines insurer. 
2361         (I) If the risk accepts an offer of coverage through the 
2362  market assistance plan or an offer of coverage through a 
2363  mechanism established by the corporation before a policy is 
2364  issued to the risk by the corporation or during the first 30 
2365  days of coverage by the corporation, and the producing agent who 
2366  submitted the application to the plan or the corporation is not 
2367  currently appointed by the insurer, the insurer shall: 
2368         (A) Pay to the producing agent of record of the policy, for 
2369  the first year, an amount that is the greater of the insurer’s 
2370  usual and customary commission for the type of policy written or 
2371  a fee equal to the usual and customary commission of the 
2372  corporation; or 
2373         (B) Offer to allow the producing agent of record of the 
2374  policy to continue servicing the policy for a period of not less 
2375  than 1 year and offer to pay the agent the greater of the 
2376  insurer’s or the corporation’s usual and customary commission 
2377  for the type of policy written. 
2378 
2379  If the producing agent is unwilling or unable to accept 
2380  appointment, the new insurer shall pay the agent in accordance 
2381  with sub-sub-sub-subparagraph (A). 
2382         (II) When the corporation enters into a contractual 
2383  agreement for a take-out plan, the producing agent of record of 
2384  the corporation policy is entitled to retain any unearned 
2385  commission on the policy, and the insurer shall: 
2386         (A) Pay to the producing agent of record of the corporation 
2387  policy, for the first year, an amount that is the greater of the 
2388  insurer’s usual and customary commission for the type of policy 
2389  written or a fee equal to the usual and customary commission of 
2390  the corporation; or 
2391         (B) Offer to allow the producing agent of record of the 
2392  corporation policy to continue servicing the policy for a period 
2393  of not less than 1 year and offer to pay the agent the greater 
2394  of the insurer’s or the corporation’s usual and customary 
2395  commission for the type of policy written. 
2396 
2397  If the producing agent is unwilling or unable to accept 
2398  appointment, the new insurer shall pay the agent in accordance 
2399  with sub-sub-sub-subparagraph (A). 
2400         c. For purposes of determining comparable coverage under 
2401  sub-subparagraphs a. and b., the comparison shall be based on 
2402  those forms and coverages that are reasonably comparable. The 
2403  corporation may rely on a determination of comparable coverage 
2404  and premium made by the producing agent who submits the 
2405  application to the corporation, made in the agent’s capacity as 
2406  the corporation’s agent. A comparison may be made solely of the 
2407  premium with respect to the main building or structure only on 
2408  the following basis: the same coverage A or other building 
2409  limits; the same percentage hurricane deductible that applies on 
2410  an annual basis or that applies to each hurricane for commercial 
2411  residential property; the same percentage of ordinance and law 
2412  coverage, if the same limit is offered by both the corporation 
2413  and the authorized insurer; the same mitigation credits, to the 
2414  extent the same types of credits are offered both by the 
2415  corporation and the authorized insurer; the same method for loss 
2416  payment, such as replacement cost or actual cash value, if the 
2417  same method is offered both by the corporation and the 
2418  authorized insurer in accordance with underwriting rules; and 
2419  any other form or coverage that is reasonably comparable as 
2420  determined by the board. If an application is submitted to the 
2421  corporation for wind-only coverage in the coastal high-risk 
2422  account, the premium for the corporation’s wind-only policy plus 
2423  the premium for the ex-wind policy that is offered by an 
2424  authorized insurer to the applicant shall be compared to the 
2425  premium for multiperil coverage offered by an authorized 
2426  insurer, subject to the standards for comparison specified in 
2427  this subparagraph. If the corporation or the applicant requests 
2428  from the authorized insurer a breakdown of the premium of the 
2429  offer by types of coverage so that a comparison may be made by 
2430  the corporation or its agent and the authorized insurer refuses 
2431  or is unable to provide such information, the corporation may 
2432  treat the offer as not being an offer of coverage from an 
2433  authorized insurer at the insurer’s approved rate. 
2434         6. Must include rules for classifications of risks and 
2435  rates therefor. 
2436         7. Must provide that if premium and investment income for 
2437  an account attributable to a particular calendar year are in 
2438  excess of projected losses and expenses for the account 
2439  attributable to that year, such excess shall be held in surplus 
2440  in the account. Such surplus shall be available to defray 
2441  deficits in that account as to future years and shall be used 
2442  for that purpose prior to assessing assessable insurers and 
2443  assessable insureds as to any calendar year. 
2444         8. Must provide objective criteria and procedures to be 
2445  uniformly applied for all applicants in determining whether an 
2446  individual risk is so hazardous as to be uninsurable. In making 
2447  this determination and in establishing the criteria and 
2448  procedures, the following shall be considered: 
2449         a. Whether the likelihood of a loss for the individual risk 
2450  is substantially higher than for other risks of the same class; 
2451  and 
2452         b. Whether the uncertainty associated with the individual 
2453  risk is such that an appropriate premium cannot be determined. 
2454 
2455  The acceptance or rejection of a risk by the corporation shall 
2456  be construed as the private placement of insurance, and the 
2457  provisions of chapter 120 shall not apply. 
2458         9. Must provide that the corporation shall make its best 
2459  efforts to procure catastrophe reinsurance at reasonable rates, 
2460  to cover its projected 100-year probable maximum loss as 
2461  determined by the board of governors. 
2462         10. The policies issued by the corporation must provide 
2463  that, if the corporation or the market assistance plan obtains 
2464  an offer from an authorized insurer to cover the risk at its 
2465  approved rates, the risk is no longer eligible for renewal 
2466  through the corporation, except as otherwise provided in this 
2467  subsection. 
2468         11. Corporation policies and applications must include a 
2469  notice that the corporation policy could, under this section, be 
2470  replaced with a policy issued by an authorized insurer that does 
2471  not provide coverage identical to the coverage provided by the 
2472  corporation. The notice shall also specify that acceptance of 
2473  corporation coverage creates a conclusive presumption that the 
2474  applicant or policyholder is aware of this potential. 
2475         12. May establish, subject to approval by the office, 
2476  different eligibility requirements and operational procedures 
2477  for any line or type of coverage for any specified county or 
2478  area if the board determines that such changes to the 
2479  eligibility requirements and operational procedures are 
2480  justified due to the voluntary market being sufficiently stable 
2481  and competitive in such area or for such line or type of 
2482  coverage and that consumers who, in good faith, are unable to 
2483  obtain insurance through the voluntary market through ordinary 
2484  methods would continue to have access to coverage from the 
2485  corporation. When coverage is sought in connection with a real 
2486  property transfer, such requirements and procedures shall not 
2487  provide for an effective date of coverage later than the date of 
2488  the closing of the transfer as established by the transferor, 
2489  the transferee, and, if applicable, the lender. 
2490         13. Must provide that, with respect to the coastal high 
2491  risk account, any assessable insurer with a surplus as to 
2492  policyholders of $25 million or less writing 25 percent or more 
2493  of its total countrywide property insurance premiums in this 
2494  state may petition the office, within the first 90 days of each 
2495  calendar year, to qualify as a limited apportionment company. A 
2496  regular assessment levied by the corporation on a limited 
2497  apportionment company for a deficit incurred by the corporation 
2498  for the coastal high-risk account in 2006 or thereafter may be 
2499  paid to the corporation on a monthly basis as the assessments 
2500  are collected by the limited apportionment company from its 
2501  insureds pursuant to s. 627.3512, but the regular assessment 
2502  must be paid in full within 12 months after being levied by the 
2503  corporation. A limited apportionment company shall collect from 
2504  its policyholders any emergency assessment imposed under sub 
2505  subparagraph (b)3.d. The plan shall provide that, if the office 
2506  determines that any regular assessment will result in an 
2507  impairment of the surplus of a limited apportionment company, 
2508  the office may direct that all or part of such assessment be 
2509  deferred as provided in subparagraph (p)4. However, there shall 
2510  be no limitation or deferment of an emergency assessment to be 
2511  collected from policyholders under sub-subparagraph (b)3.d. 
2512         14. Must provide that the corporation appoint as its 
2513  licensed agents only those agents who also hold an appointment 
2514  as defined in s. 626.015(3) with an insurer who at the time of 
2515  the agent’s initial appointment by the corporation is authorized 
2516  to write and is actually writing personal lines residential 
2517  property coverage, commercial residential property coverage, or 
2518  commercial nonresidential property coverage within the state. 
2519         15. Must provide, by July 1, 2007, a premium payment plan 
2520  option to its policyholders which allows at a minimum for 
2521  quarterly and semiannual payment of premiums. A monthly payment 
2522  plan may, but is not required to, be offered. 
2523         16. Must limit coverage on mobile homes or manufactured 
2524  homes built prior to 1994 to actual cash value of the dwelling 
2525  rather than replacement costs of the dwelling. 
2526         17. May provide such limits of coverage as the board 
2527  determines, consistent with the requirements of this subsection. 
2528         18. May require commercial property to meet specified 
2529  hurricane mitigation construction features as a condition of 
2530  eligibility for coverage. 
2531         (d)1. All prospective employees for senior management 
2532  positions, as defined by the plan of operation, are subject to 
2533  background checks as a prerequisite for employment. The office 
2534  shall conduct background checks on such prospective employees 
2535  pursuant to ss. 624.34, 624.404(3), and 628.261. 
2536         2. On or before July 1 of each year, employees of the 
2537  corporation are required to sign and submit a statement 
2538  attesting that they do not have a conflict of interest, as 
2539  defined in part III of chapter 112. As a condition of 
2540  employment, all prospective employees are required to sign and 
2541  submit to the corporation a conflict-of-interest statement. 
2542         3. Senior managers and members of the board of governors 
2543  are subject to the provisions of part III of chapter 112, 
2544  including, but not limited to, the code of ethics and public 
2545  disclosure and reporting of financial interests, pursuant to s. 
2546  112.3145. Notwithstanding s. 112.3143(2), a board member may not 
2547  vote on any measure that would inure to his or her special 
2548  private gain or loss; that he or she knows would inure to the 
2549  special private gain or loss of any principal by whom he or she 
2550  is retained or to the parent organization or subsidiary of a 
2551  corporate principal by which he or she is retained, other than 
2552  an agency as defined in s. 112.312; or that he or she knows 
2553  would inure to the special private gain or loss of a relative or 
2554  business associate of the public officer. Before the vote is 
2555  taken, such member shall publicly state to the assembly the 
2556  nature of the his or her interest in the matter from which he or 
2557  she is abstaining from voting and, within 15 days after the vote 
2558  occurs, disclose the nature of his or her interest as a public 
2559  record in a memorandum filed with the person responsible for 
2560  recording the minutes of the meeting, who shall incorporate the 
2561  memorandum in the minutes. Senior managers and board members are 
2562  also required to file such disclosures with the Commission on 
2563  Ethics and the Office of Insurance Regulation. The executive 
2564  director of the corporation or his or her designee shall notify 
2565  each existing and newly appointed and existing appointed member 
2566  of the board of governors and senior managers of their duty to 
2567  comply with the reporting requirements of part III of chapter 
2568  112. At least quarterly, the executive director or his or her 
2569  designee shall submit to the Commission on Ethics a list of 
2570  names of the senior managers and members of the board of 
2571  governors who are subject to the public disclosure requirements 
2572  under s. 112.3145. 
2573         4. Notwithstanding s. 112.3148 or s. 112.3149, or any other 
2574  provision of law, an employee or board member may not knowingly 
2575  accept, directly or indirectly, any gift or expenditure from a 
2576  person or entity, or an employee or representative of such 
2577  person or entity, that has a contractual relationship with the 
2578  corporation or who is under consideration for a contract. An 
2579  employee or board member who fails to comply with subparagraph 
2580  3. or this subparagraph is subject to penalties provided under 
2581  ss. 112.317 and 112.3173. 
2582         5. Any senior manager of the corporation who is employed on 
2583  or after January 1, 2007, regardless of the date of hire, who 
2584  subsequently retires or terminates employment is prohibited from 
2585  representing another person or entity before the corporation for 
2586  2 years after retirement or termination of employment from the 
2587  corporation. 
2588         6. Any senior manager of the corporation who is employed on 
2589  or after January 1, 2007, regardless of the date of hire, who 
2590  subsequently retires or terminates employment is prohibited from 
2591  having any employment or contractual relationship for 2 years 
2592  with an insurer that has entered into a take-out bonus agreement 
2593  with the corporation. 
2594         (y) It is the intent of the Legislature that the amendments 
2595  to this subsection enacted in 2002 should, over time, reduce the 
2596  probable maximum windstorm losses in the residual markets and 
2597  should reduce the potential assessments to be levied on property 
2598  insurers and policyholders statewide. In furtherance of this 
2599  intent: 
2600         1. The board shall, on or before February 1 of each year, 
2601  provide a report to the President of the Senate and the Speaker 
2602  of the House of Representatives showing the reduction or 
2603  increase in the 100-year probable maximum loss attributable to 
2604  wind-only coverages and the quota share program under this 
2605  subsection combined, as compared to the benchmark 100-year 
2606  probable maximum loss of the Florida Windstorm Underwriting 
2607  Association. For purposes of this paragraph, the benchmark 100 
2608  year probable maximum loss of the Florida Windstorm Underwriting 
2609  Association shall be the calculation dated February 2001 and 
2610  based on November 30, 2000, exposures. In order to ensure 
2611  comparability of data, the board shall use the same methods for 
2612  calculating its probable maximum loss as were used to calculate 
2613  the benchmark probable maximum loss. 
2614         2. Beginning December 1, 2012 2010, if the report under 
2615  subparagraph 1. for any year indicates that the 100-year 
2616  probable maximum loss attributable to wind-only coverages and 
2617  the quota share program combined does not reflect a reduction of 
2618  at least 25 percent from the benchmark, the board shall reduce 
2619  the boundaries of the high-risk area eligible for wind-only 
2620  coverages under this subsection in a manner calculated to reduce 
2621  such probable maximum loss to an amount at least 25 percent 
2622  below the benchmark. 
2623         3. Beginning February 1, 2015, if the report under 
2624  subparagraph 1. for any year indicates that the 100-year 
2625  probable maximum loss attributable to wind-only coverages and 
2626  the quota share program combined does not reflect a reduction of 
2627  at least 50 percent from the benchmark, the boundaries of the 
2628  high-risk area eligible for wind-only coverages under this 
2629  subsection shall be reduced by the elimination of any area that 
2630  is not seaward of a line 1,000 feet inland from the Intracoastal 
2631  Waterway. 
2632         Section 17. The Division of Statutory Revision is directed 
2633  to prepare a reviser’s bill for introduction at the next regular 
2634  session of the Legislature to change the term “high-risk 
2635  account” to “coastal account” to conform the Florida Statutes to 
2636  the amendment to s. 627.351(6)(b)2.a.(III), Florida Statutes, 
2637  made by this act. 
2638         Section 18. Subsection (2) of section 627.4133, Florida 
2639  Statutes, is amended to read: 
2640         627.4133 Notice of cancellation, nonrenewal, or renewal 
2641  premium.— 
2642         (2) With respect to any personal lines or commercial 
2643  residential property insurance policy, including, but not 
2644  limited to, any homeowner’s, mobile home owner’s, farmowner’s, 
2645  condominium association, condominium unit owner’s, apartment 
2646  building, or other policy covering a residential structure or 
2647  its contents: 
2648         (a) The insurer shall give the named insured at least 45 
2649  days’ advance written notice of the renewal premium. 
2650         (b) The insurer shall give the named insured written notice 
2651  of nonrenewal, cancellation, or termination at least 100 days 
2652  before prior to the effective date of the nonrenewal, 
2653  cancellation, or termination. However, the insurer shall give at 
2654  least 100 days’ written notice, or written notice by June 1, 
2655  whichever is earlier, for any nonrenewal, cancellation, or 
2656  termination that would be effective between June 1 and November 
2657  30. The notice must include the reason or reasons for the 
2658  nonrenewal, cancellation, or termination, except that: 
2659         1. The insurer must shall give the named insured written 
2660  notice of nonrenewal, cancellation, or termination at least 180 
2661  days before prior to the effective date of the nonrenewal, 
2662  cancellation, or termination for a named insured whose 
2663  residential structure has been insured by that insurer or an 
2664  affiliated insurer for at least a 5-year period immediately 
2665  prior to the date of the written notice. 
2666         2. When cancellation is for nonpayment of premium, at least 
2667  10 days’ written notice of cancellation accompanied by the 
2668  reason therefor must shall be given. As used in this 
2669  subparagraph, the term “nonpayment of premium” means failure of 
2670  the named insured to discharge when due any of her or his 
2671  obligations in connection with the payment of premiums on a 
2672  policy or any installment of such premium, whether the premium 
2673  is payable directly to the insurer or its agent or indirectly 
2674  under any premium finance plan or extension of credit, or 
2675  failure to maintain membership in an organization if such 
2676  membership is a condition precedent to insurance coverage. 
2677  “Nonpayment of premium” also means the failure of a financial 
2678  institution to honor an insurance applicant’s check after 
2679  delivery to a licensed agent for payment of a premium, even if 
2680  the agent has previously delivered or transferred the premium to 
2681  the insurer. If a dishonored check represents the initial 
2682  premium payment, the contract and all contractual obligations 
2683  are shall be void ab initio unless the nonpayment is cured 
2684  within the earlier of 5 days after actual notice by certified 
2685  mail is received by the applicant or 15 days after notice is 
2686  sent to the applicant by certified mail or registered mail, and 
2687  if the contract is void, any premium received by the insurer 
2688  from a third party must shall be refunded to that party in full. 
2689         3. When such cancellation or termination occurs during the 
2690  first 90 days during which the insurance is in force and the 
2691  insurance is canceled or terminated for reasons other than 
2692  nonpayment of premium, at least 20 days’ written notice of 
2693  cancellation or termination accompanied by the reason therefor 
2694  must shall be given except if where there has been a material 
2695  misstatement or misrepresentation or failure to comply with the 
2696  underwriting requirements established by the insurer. 
2697         4. The requirement for providing written notice of 
2698  nonrenewal by June 1 of any nonrenewal that would be effective 
2699  between June 1 and November 30 does not apply to the following 
2700  situations, but the insurer remains subject to the requirement 
2701  to provide such notice at least 100 days before prior to the 
2702  effective date of nonrenewal: 
2703         a. A policy that is nonrenewed due to a revision in the 
2704  coverage for sinkhole losses and catastrophic ground cover 
2705  collapse pursuant to s. 627.706, as amended by s. 30, chapter 
2706  2007-1, Laws of Florida. 
2707         b. A policy that is nonrenewed by Citizens Property 
2708  Insurance Corporation, pursuant to s. 627.351(6), for a policy 
2709  that has been assumed by an authorized insurer offering 
2710  replacement or renewal coverage to the policyholder is exempt 
2711  from the notice requirements of paragraph (a) and this 
2712  paragraph. In such cases, Citizens Property Insurance 
2713  Corporation shall give the named insured written notice of 
2714  nonrenewal at least 45 days before the effective date of the 
2715  nonrenewal. 
2716 
2717  After the policy has been in effect for 90 days, the policy may 
2718  shall not be canceled by the insurer except if when there has 
2719  been a material misstatement, a nonpayment of premium, a failure 
2720  to comply with underwriting requirements established by the 
2721  insurer within 90 days of the date of effectuation of coverage, 
2722  or a substantial change in the risk covered by the policy or if 
2723  when the cancellation is for all insureds under such policies 
2724  for a given class of insureds. This paragraph does not apply to 
2725  individually rated risks having a policy term of less than 90 
2726  days. 
2727         5. Notwithstanding any other provision of law, an insurer 
2728  may cancel or nonrenew a property insurance policy upon a 
2729  minimum of 45 days’ notice if the office finds that the early 
2730  cancellation of some or all of the insurer’s policies is 
2731  necessary to protect the best interests of the public or 
2732  policyholders and the office approves the insurer’s plan for 
2733  early cancellation or nonrenewal of some or all of its policies. 
2734  The office may base such a finding upon the financial condition 
2735  of the insurer, lack of adequate reinsurance coverage for 
2736  hurricane risk, or other relevant factors. The office may 
2737  condition its finding on the consent of the insurer to be placed 
2738  in administrative supervision pursuant to s. 624.81 or consent 
2739  to the appointment of a receiver under chapter 631. 
2740         (c) If the insurer fails to provide the notice required by 
2741  this subsection, other than the 10-day notice, the coverage 
2742  provided to the named insured shall remain in effect until the 
2743  effective date of replacement coverage or until the expiration 
2744  of a period of days after the notice is given equal to the 
2745  required notice period, whichever occurs first. The premium for 
2746  the coverage shall remain the same during any such extension 
2747  period except that, in the event of failure to provide notice of 
2748  nonrenewal, if the rate filing then in effect would have 
2749  resulted in a premium reduction, the premium during such 
2750  extension must shall be calculated based on the later rate 
2751  filing. 
2752         (d)1. Upon a declaration of an emergency pursuant to s. 
2753  252.36 and the filing of an order by the Commissioner of 
2754  Insurance Regulation, an insurer may not cancel or nonrenew a 
2755  personal residential or commercial residential property 
2756  insurance policy covering a dwelling or residential property 
2757  located in this state which has been damaged as a result of a 
2758  hurricane or wind loss that is the subject of the declaration of 
2759  emergency for a period of 90 days after the dwelling or 
2760  residential property has been repaired. A structure is deemed to 
2761  be repaired when substantially completed and restored to the 
2762  extent that it is insurable by another authorized insurer that 
2763  is writing policies in this state. 
2764         2. However, an insurer or agent may cancel or nonrenew such 
2765  a policy before prior to the repair of the dwelling or 
2766  residential property: 
2767         a. Upon 10 days’ notice for nonpayment of premium; or 
2768         b. Upon 45 days’ notice: 
2769         (I) For a material misstatement or fraud related to the 
2770  claim; 
2771         (II) If the insurer determines that the insured has 
2772  unreasonably caused a delay in the repair of the dwelling; or 
2773         (III) If the insurer has paid policy limits. 
2774         3. If the insurer elects to nonrenew a policy covering a 
2775  property that has been damaged, the insurer shall provide at 
2776  least 90 days’ notice to the insured that the insurer intends to 
2777  nonrenew the policy 90 days after the dwelling or residential 
2778  property has been repaired. Nothing in this paragraph shall 
2779  prevent the insurer from canceling or nonrenewing the policy 90 
2780  days after the repairs are complete for the same reasons the 
2781  insurer would otherwise have canceled or nonrenewed the policy 
2782  but for the limitations of subparagraph 1. The Financial 
2783  Services Commission may adopt rules, and the Commissioner of 
2784  Insurance Regulation may issue orders, necessary to implement 
2785  this paragraph. 
2786         4. This paragraph shall also applies apply to personal 
2787  residential and commercial residential policies covering 
2788  property that was damaged as the result of Tropical Storm 
2789  Bonnie, Hurricane Charley, Hurricane Frances, Hurricane Ivan, or 
2790  Hurricane Jeanne. 
2791         (e) If any cancellation or nonrenewal of a policy subject 
2792  to this subsection is to take effect during the duration of a 
2793  hurricane as defined in s. 627.4025(2)(c), the effective date of 
2794  such cancellation or nonrenewal is extended until the end of the 
2795  duration of such hurricane. The insurer may collect premium at 
2796  the prior rates or the rates then in effect for the period of 
2797  time for which coverage is extended. This paragraph does not 
2798  apply to any property with respect to which replacement coverage 
2799  has been obtained and which is in effect for a claim occurring 
2800  during the duration of the hurricane. 
2801         Section 19. Section 627.43141, Florida Statutes, is created 
2802  to read: 
2803         627.43141 Notice of change in policy terms.— 
2804         (1)� As used in this section, the term: 
2805         (a)� “Change in policy terms” means the modification, 
2806  addition, or deletion of any term, coverage, duty, or condition 
2807  from the previous policy. The correction of typographical or 
2808  scrivener’s errors or the application of mandated legislative 
2809  changes is not a change in policy terms. 
2810         (b)� “Policy” means a written contract of personal lines 
2811  property insurance or a written agreement for insurance, or the 
2812  certificate of such insurance, by whatever name called, and 
2813  includes all clauses, riders, endorsements, and papers that are 
2814  a part of such policy. The term does not include a binder as 
2815  defined in s. 627.420 unless the duration of the binder period 
2816  exceeds 60 days. 
2817         (c)� “Renewal” means the issuance and delivery by an insurer 
2818  of a policy superseding at the end of the policy period a policy 
2819  previously issued and delivered by the same insurer or the 
2820  issuance and delivery of a certificate or notice extending the 
2821  term of a policy beyond its policy period or term. Any policy 
2822  that has a policy period or term of less than 6 months or any 
2823  policy that does not have a fixed expiration date shall, for 
2824  purposes of this section, be considered as written for 
2825  successive policy periods or terms of 6 months. 
2826         (2)� A renewal policy may contain a change in policy terms. 
2827  If a renewal policy contains a change in policy terms, the 
2828  insurer shall give the named insured a written notice of the 
2829  change in policy terms, which must be enclosed along with the 
2830  written notice of renewal premium required by ss. 627.4133 and 
2831  627.728. Such notice should be entitled “Notice of Change in 
2832  Policy Terms.” 
2833         (3)� Although not required, proof of mailing or registered 
2834  mailing through the United States Postal Service of the Notice 
2835  of Change in Policy Terms to the named insured at the address 
2836  shown in the policy is sufficient proof of notice. 
2837         (4)� Receipt of payment of the premium for the renewal 
2838  policy by the insurer is deemed to be acceptance of the new 
2839  policy terms by the named insured. 
2840         (5)� If an insurer fails to provide the notice required in 
2841  subsection (2), the original policy terms shall remain in effect 
2842  until the next renewal and the proper service of the notice or 
2843  until the effective date of replacement coverage obtained by the 
2844  named insured, whichever occurs first. 
2845         (6)� The intent of this section is to: 
2846         (a)� Allow an insurer to make a change in policy terms 
2847  without nonrenewing policyholders that the insurer wishes to 
2848  continue insuring. 
2849         (b)� Alleviate concern and confusion to the policyholder 
2850  caused by the required policy nonrenewal for the limited issue 
2851  when an insurer intends to renew the insurance policy but the 
2852  new policy contains a change in policy terms. 
2853         (c)� Encourage policyholders to discuss their coverages with 
2854  their insurance agents. 
2855         Section 20. Section 627.7011, Florida Statutes, is amended 
2856  to read: 
2857         627.7011 Homeowners’ policies; offer of replacement cost 
2858  coverage and law and ordinance coverage.— 
2859         (1) Before Prior to issuing or renewing a homeowner’s 
2860  insurance policy on or after October 1, 2005, or prior to the 
2861  first renewal of a homeowner’s insurance policy on or after 
2862  October 1, 2005, the insurer must offer each of the following: 
2863         (a) A policy or endorsement providing that any loss which 
2864  is repaired or replaced will be adjusted on the basis of 
2865  replacement costs not exceeding policy limits as to the 
2866  dwelling, rather than actual cash value, but not including costs 
2867  necessary to meet applicable laws and ordinances regulating the 
2868  construction, use, or repair of any property or requiring the 
2869  tearing down of any property, including the costs of removing 
2870  debris. 
2871         (b) A policy or endorsement providing that, subject to 
2872  other policy provisions, any loss which is repaired or replaced 
2873  at any location will be adjusted on the basis of replacement 
2874  costs not exceeding policy limits as to the dwelling, rather 
2875  than actual cash value, and also including costs necessary to 
2876  meet applicable laws and ordinances regulating the construction, 
2877  use, or repair of any property or requiring the tearing down of 
2878  any property, including the costs of removing debris.; However, 
2879  such additional costs necessary to meet applicable laws and 
2880  ordinances may be limited to either 25 percent or 50 percent of 
2881  the dwelling limit, as selected by the policyholder, and such 
2882  coverage shall apply only to repairs of the damaged portion of 
2883  the structure unless the total damage to the structure exceeds 
2884  50 percent of the replacement cost of the structure. 
2885 
2886  An insurer is not required to make the offers required by this 
2887  subsection with respect to the issuance or renewal of a 
2888  homeowner’s policy that contains the provisions specified in 
2889  paragraph (b) for law and ordinance coverage limited to 25 
2890  percent of the dwelling limit, except that the insurer must 
2891  offer the law and ordinance coverage limited to 50 percent of 
2892  the dwelling limit. This subsection does not prohibit the offer 
2893  of a guaranteed replacement cost policy. 
2894         (2) Unless the insurer obtains the policyholder’s written 
2895  refusal of the policies or endorsements specified in subsection 
2896  (1), any policy covering the dwelling is deemed to include the 
2897  law and ordinance coverage limited to 25 percent of the dwelling 
2898  limit. The rejection or selection of alternative coverage shall 
2899  be made on a form approved by the office. The form shall fully 
2900  advise the applicant of the nature of the coverage being 
2901  rejected. If this form is signed by a named insured, it will be 
2902  conclusively presumed that there was an informed, knowing 
2903  rejection of the coverage or election of the alternative 
2904  coverage on behalf of all insureds. Unless the policyholder 
2905  requests in writing the coverage specified in this section, it 
2906  need not be provided in or supplemental to any other policy that 
2907  renews, insures, extends, changes, supersedes, or replaces an 
2908  existing policy when the policyholder has rejected the coverage 
2909  specified in this section or has selected alternative coverage. 
2910  The insurer must provide such policyholder with notice of the 
2911  availability of such coverage in a form approved by the office 
2912  at least once every 3 years. The failure to provide such notice 
2913  constitutes a violation of this code, but does not affect the 
2914  coverage provided under the policy. 
2915         (3)(a) In the event of a loss for which a dwelling is 
2916  insured on the basis of replacement costs, the insurer initially 
2917  must pay at least the actual cash value of the insured loss, 
2918  less any applicable deductible. An insured shall subsequently 
2919  enter into a contract for the performance of building and 
2920  structural repairs. The insurer shall pay any remaining amounts 
2921  incurred to perform such repairs as the work is performed. With 
2922  the exception of incidental expenses to mitigate further damage, 
2923  the insurer or any contractor or subcontractor may not require 
2924  the policyholder to advance payment for such repairs or 
2925  expenses. The insurer may waive the requirement for a contract 
2926  as provided in this paragraph. An insured shall have a period of 
2927  one 1 year after the date the insurer pays actual cash value to 
2928  make a claim for replacement cost. If a total loss of a dwelling 
2929  occurs, the insurer shall pay the replacement cost coverage 
2930  without reservation or holdback of any depreciation in value, 
2931  pursuant to s. 627.702. 
2932         (b) In the event of a loss for which a dwelling or personal 
2933  property is insured on the basis of replacement costs, the 
2934  insurer shall pay the replacement cost without reservation or 
2935  holdback of any depreciation in value, whether or not the 
2936  insured replaces or repairs the dwelling or property. 
2937         (4) A Any homeowner’s insurance policy issued or renewed on 
2938  or after October 1, 2005, must include in bold type no smaller 
2939  than 18 points the following statement: 
2940 
2941         “LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE 
2942         THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO 
2943         CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE 
2944         NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS 
2945         COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE 
2946         DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT.” 
2947  The intent of this subsection is to encourage policyholders to 
2948  purchase sufficient coverage to protect them in case events 
2949  excluded from the standard homeowners policy, such as law and 
2950  ordinance enforcement and flood, combine with covered events to 
2951  produce damage or loss to the insured property. The intent is 
2952  also to encourage policyholders to discuss these issues with 
2953  their insurance agent. 
2954         (5) Nothing in This section does not shall be construed to 
2955  apply to policies not considered to be “homeowners’ policies,” 
2956  as that term is commonly understood in the insurance industry. 
2957  This section specifically does not apply to mobile home 
2958  policies. Nothing in This section does not limit shall be 
2959  construed as limiting the ability of any insurer to reject or 
2960  nonrenew any insured or applicant on the grounds that the 
2961  structure does not meet underwriting criteria applicable to 
2962  replacement cost or law and ordinance policies or for other 
2963  lawful reasons. 
2964         (6) This section does not prohibit an insurer from limiting 
2965  its liability under a policy or endorsement providing that loss 
2966  will be adjusted on the basis of replacement costs to the lesser 
2967  of: 
2968         (a) The limit of liability shown on the policy declarations 
2969  page; 
2970         (b) The reasonable and necessary cost to repair the 
2971  damaged, destroyed, or stolen covered property; or 
2972         (c) The reasonable and necessary cost to replace the 
2973  damaged, destroyed, or stolen covered property. 
2974         (7) This section does not prohibit an insurer from 
2975  exercising its right to repair damaged property in compliance 
2976  with its policy and s. 627.702(7). 
2977         Section 21. Paragraph (a) of subsection (5) of section 
2978  627.70131, Florida Statutes, is amended to read: 
2979         627.70131 Insurer’s duty to acknowledge communications 
2980  regarding claims; investigation.— 
2981         (5)(a) Within 90 days after an insurer receives notice of 
2982  an initial or supplemental a property insurance claim from a 
2983  policyholder, the insurer shall pay or deny such claim or a 
2984  portion of the claim unless the failure to pay such claim or a 
2985  portion of the claim is caused by factors beyond the control of 
2986  the insurer which reasonably prevent such payment. Any payment 
2987  of an initial or supplemental a claim or portion of such a claim 
2988  made paid 90 days after the insurer receives notice of the 
2989  claim, or made paid more than 15 days after there are no longer 
2990  factors beyond the control of the insurer which reasonably 
2991  prevented such payment, whichever is later, shall bear interest 
2992  at the rate set forth in s. 55.03. Interest begins to accrue 
2993  from the date the insurer receives notice of the claim. The 
2994  provisions of this subsection may not be waived, voided, or 
2995  nullified by the terms of the insurance policy. If there is a 
2996  right to prejudgment interest, the insured shall select whether 
2997  to receive prejudgment interest or interest under this 
2998  subsection. Interest is payable when the claim or portion of the 
2999  claim is paid. Failure to comply with this subsection 
3000  constitutes a violation of this code. However, failure to comply 
3001  with this subsection shall not form the sole basis for a private 
3002  cause of action. 
3003         Section 22. Section 627.711, Florida Statutes, is amended 
3004  to read: 
3005         627.711 Notice of premium discounts for hurricane loss 
3006  mitigation; uniform mitigation verification inspection form.— 
3007         (1) Using a form prescribed by the Office of Insurance 
3008  Regulation, the insurer shall clearly notify the applicant or 
3009  policyholder of any personal lines residential property 
3010  insurance policy, at the time of the issuance of the policy and 
3011  at each renewal, of the availability and the range of each 
3012  premium discount, credit, other rate differential, or reduction 
3013  in deductibles, and combinations of discounts, credits, rate 
3014  differentials, or reductions in deductibles, for properties on 
3015  which fixtures or construction techniques demonstrated to reduce 
3016  the amount of loss in a windstorm can be or have been installed 
3017  or implemented. The prescribed form shall describe generally 
3018  what actions the policyholders may be able to take to reduce 
3019  their windstorm premium. The prescribed form and a list of such 
3020  ranges approved by the office for each insurer licensed in the 
3021  state and providing such discounts, credits, other rate 
3022  differentials, or reductions in deductibles for properties 
3023  described in this subsection shall be available for electronic 
3024  viewing and download from the Department of Financial Services’ 
3025  or the Office of Insurance Regulation’s Internet website. The 
3026  Financial Services Commission may adopt rules to implement this 
3027  subsection. 
3028         (2)(a) By July 1, 2007, The Financial Services Commission 
3029  shall develop by rule a uniform mitigation verification 
3030  inspection form that shall be used by all insurers when 
3031  submitted by policyholders for the purpose of factoring 
3032  discounts for wind insurance. In developing the form, the 
3033  commission shall seek input from insurance, construction, and 
3034  building code representatives. Further, the commission shall 
3035  provide guidance as to the length of time the inspection results 
3036  are valid. An insurer shall accept as valid a uniform mitigation 
3037  verification form certified by the Department of Financial 
3038  Services or signed by the following authorized mitigation 
3039  inspectors: 
3040         1.(a) A home inspector licensed under s. 468.8314 who has 
3041  completed at least 3 hours of hurricane mitigation training 
3042  which includes hurricane mitigation techniques and compliance 
3043  with the uniform mitigation verification form and completion of 
3044  a proficiency exam. Thereafter, home inspectors licensed under 
3045  s. 468.8314, must complete at least 2 hours of continuing 
3046  education, as part of the existing licensure renewal 
3047  requirements each year, related to mitigation inspection and the 
3048  uniform mitigation form hurricane mitigation inspector certified 
3049  by the My Safe Florida Home program; 
3050         2.(b) A building code inspector certified under s. 468.607; 
3051         3.(c) A general, building, or residential contractor 
3052  licensed under s. 489.111; 
3053         4.(d) A professional engineer licensed under s. 471.015 who 
3054  has passed the appropriate equivalency test of the building code 
3055  training program as required by s. 553.841; 
3056         5.(e) A professional architect licensed under s. 481.213; 
3057  or 
3058         6.(f) Any other individual or entity recognized by the 
3059  insurer as possessing the necessary qualifications to properly 
3060  complete a uniform mitigation verification form. 
3061         (b) An insurer may, but is not required to, accept a form 
3062  from any other person possessing qualifications and experience 
3063  acceptable to the insurer. 
3064         (3) A person who is authorized to sign a mitigation 
3065  verification form must inspect the structures referenced by the 
3066  form personally, not through employees or other persons, and 
3067  must certify or attest to personal inspection of the structures 
3068  referenced by the form. However, licensees under s. 489.111, may 
3069  authorize a direct employee, who is not an independent 
3070  contractor, and who possesses the requisite skill, knowledge and 
3071  experience to conduct a mitigation verification inspection. 
3072  Insurers shall have the right to request and obtain information 
3073  from the authorized mitigation inspector under s. 489.111, 
3074  regarding any authorized employee’s qualifications prior to 
3075  accepting a mitigation verification form performed by an 
3076  employee that is not licensed under s. 489.111. 
3077         (4) An authorized mitigation inspector that signs a uniform 
3078  mitigation form, and a direct employee authorized to conduct 
3079  mitigation verification inspections under paragraph (3), may not 
3080  commit misconduct in performing hurricane mitigation inspections 
3081  or in completing a uniform mitigation form that causes financial 
3082  harm to a customer or their insurer; or that jeopardizes a 
3083  customer’s health and safety. Misconduct occurs when an 
3084  authorized mitigation inspector signs a uniform mitigation 
3085  verification form that: 
3086         (a) Falsely indicates that he or she personally inspected 
3087  the structures referenced by the form; 
3088         (b) Falsely indicates the existence of a feature which 
3089  entitles an insured to a mitigation discount which the inspector 
3090  knows does not exist or did not personally inspect; 
3091         (c) Contains erroneous information due to the gross 
3092  negligence of the inspector; or 
3093         (d) Contains a pattern of demonstrably false information 
3094  regarding the existence of mitigation features that could give 
3095  an insured a false evaluation of the ability of the structure to 
3096  withstand major damage from a hurricane endangering the safety 
3097  of the insured’s life and property. 
3098         (5) The licensing board of an authorized mitigation 
3099  inspector that violates subsection (4) may commence disciplinary 
3100  proceedings and impose administrative fines and other sanctions 
3101  authorized under the authorized mitigation inspector’s licensing 
3102  act. Authorized mitigation inspectors licensed under s. 489.111, 
3103  shall be directly liable for the acts of employees that violate 
3104  subsection (4) as if the authorized mitigation inspector 
3105  personally performed the inspection. 
3106         (6) An insurer, person, or other entity that obtains 
3107  evidence of fraud or evidence that an authorized mitigation 
3108  inspector or an employee authorized to conduct mitigation 
3109  verification inspections under paragraph (3), has made false 
3110  statements in the completion of a mitigation inspection form 
3111  shall file a report with the Division of Insurance Fraud, along 
3112  with all of the evidence in its possession that supports the 
3113  allegation of fraud or falsity. An insurer, person, or other 
3114  entity making the report shall be immune from liability in 
3115  accordance with s. 626.989(4), for any statements made in the 
3116  report, during the investigation, or in connection with the 
3117  report. The Division of Insurance Fraud shall issue an 
3118  investigative report if it finds that probable cause exists to 
3119  believe that the authorized mitigation inspector, or an employee 
3120  authorized to conduct mitigation verification inspections under 
3121  paragraph (3), made intentionally false or fraudulent statements 
3122  in the inspection form. Upon conclusion of the investigation and 
3123  a finding of probable cause that a violation has occurred, the 
3124  Division of Insurance Fraud shall send a copy of the 
3125  investigative report to the office and a copy to the agency 
3126  responsible for the professional licensure of the authorized 
3127  mitigation inspector, whether or not a prosecutor takes action 
3128  based upon the report. 
3129         (7)(3) An individual or entity who knowingly provides or 
3130  utters a false or fraudulent mitigation verification form with 
3131  the intent to obtain or receive a discount on an insurance 
3132  premium to which the individual or entity is not entitled 
3133  commits a misdemeanor of the first degree, punishable as 
3134  provided in s. 775.082 or s. 775.083. 
3135         (8) At its expense, the insurer may require that any 
3136  uniform mitigation verification form provided by an authorized 
3137  mitigation inspector or inspection company be independently 
3138  verified by an inspector, inspection company or an independent 
3139  third-party quality assurance provider which does possess a 
3140  quality assurance program prior to accepting the uniform 
3141  mitigation verification form as valid. 
3142         Section 23. Section 628.252, Florida Statutes, is created 
3143  to read: 
3144         628.252 Servicing affiliates of domestic property 
3145  insurers.—Every domestic property insurer shall notify the 
3146  office of its intention to enter into with affiliates all 
3147  management agreements, service contracts, and cost-sharing 
3148  arrangements. A domestic property insurer may not enter into 
3149  such an agreement, contract, or arrangement unless the insurer 
3150  has it has provided the office with at least 30 days’ written 
3151  notice of its intention to enter into such agreement, contract, 
3152  or arrangement, or such shorter period as the office, in its 
3153  discretion, may permit and the office has not disapproved such 
3154  agreement, contract, or arrangement within such period. This 
3155  section does not limit any existing authority of the office. 
3156         Section 24. The sums of $263,200 in nonrecurring funds and 
3157  $47,500 in recurring funds from the Insurance Regulatory Trust 
3158  Fund are appropriated and one full-time equivalent position and 
3159  associated salary rate is authorized to the Office of Insurance 
3160  Regulation to implement the provisions of the act relating to 
3161  the design, development, and operation of a comprehensive 
3162  website for consumers which provides comparisons of homeowners’ 
3163  insurance rates and products. 
3164         Section 25. Except as otherwise expressly provided in this 
3165  act and except for this section, which shall take effect June 1, 
3166  2010, this act shall take effect July 1, 2010.