| 1 |
A bill to be entitled |
| 2 |
An act relating to property insurance;
amending s. |
| 3 |
624.404, F.S.; prohibiting certain
insurers from |
| 4 |
transacting residential property
insurance business under |
| 5 |
certain circumstances; prohibiting
private passenger |
| 6 |
automobile insurance insurers from
writing such insurance |
| 7 |
under certain circumstances; amending s.
627.062, F.S.; |
| 8 |
deleting "use and file"
provisions; amending s. 627.351, |
| 9 |
F.S.; eliminating the distinction
between homestead and |
| 10 |
nonhomestead properties for coverage
under the Citizens |
| 11 |
Property Insurance Corporation; creating
s. 627.70185, |
| 12 |
F.S.; providing a prohibition and
requirements for |
| 13 |
insurers in denying coverage; providing
an effective date. |
| 14 |
|
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Be It Enacted by the Legislature of the
State of Florida: |
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|
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Section 1. Subsection
(8) is added to section 624.404, |
| 18 |
Florida Statutes, to read: |
| 19 |
624.404 General
eligibility of insurers for certificate of |
| 20 |
authority.--To qualify for and hold
authority to transact |
| 21 |
insurance in this state, an insurer must
be otherwise in |
| 22 |
compliance with this code and with its
charter powers and must |
| 23 |
be an incorporated stock insurer, an
incorporated mutual |
| 24 |
insurer, or a reciprocal insurer, of the
same general type as |
| 25 |
may be formed as a domestic insurer
under this code; except |
| 26 |
that: |
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(8) Effective
January 1, 2008, a new certificate of |
| 28 |
authority may not be
issued to an insurer domiciled in this |
| 29 |
state for the
transaction of residential property insurance |
| 30 |
business in this
state if the insurer is a wholly owned |
| 31 |
subsidiary of an
insurer authorized in any other state. |
| 32 |
Section
2. Effective January 1, 2008, an insurer writing |
| 33 |
private passenger
automobile insurance in this state may not |
| 34 |
continue to write
such insurance if the insurer writes |
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homeowners' insurance
in another state but not in this state |
| 36 |
unless the insurer
writing private passenger automobile |
| 37 |
insurance in this
state is affiliated with an insurer writing |
| 38 |
homeowners' insurance
in this state. |
| 39 |
Section 3. Paragraphs
(a) and (h) of subsection (2) of |
| 40 |
section 627.062, Florida Statutes, as
amended by section 18 of |
| 41 |
chapter 2007-1, Laws of Florida, are
amended to read: |
| 42 |
627.062 Rate
standards.-- |
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(2) As
to all such classes of insurance: |
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(a) Insurers
or rating organizations shall establish and |
| 45 |
use rates, rating schedules, or rating
manuals to allow the |
| 46 |
insurer a reasonable rate of return on
such classes of insurance |
| 47 |
written in this state. A copy of rates,
rating schedules, rating |
| 48 |
manuals, premium credits or discount
schedules, and surcharge |
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schedules, and changes thereto, shall be
filed with the office |
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under one of the following procedures
except as provided in |
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subparagraph 3.: |
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1. If
the filing is made at least 90 days before the |
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proposed effective date and the filing
is not implemented during |
| 54 |
the office's review of the filing and
any proceeding and |
| 55 |
judicial review, then such filing shall
be considered a "file |
| 56 |
and use" filing. In such case, the
office shall finalize its |
| 57 |
review by issuance of a notice of intent
to approve or a notice |
| 58 |
of intent to disapprove within 90 days
after receipt of the |
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filing. The notice of intent to approve
and the notice of intent |
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to disapprove constitute agency action
for purposes of the |
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Administrative Procedure Act. Requests
for supporting |
| 62 |
information, requests for mathematical
or mechanical |
| 63 |
corrections, or notification to the
insurer by the office of its |
| 64 |
preliminary findings shall not toll the
90-day period during any |
| 65 |
such proceedings and subsequent judicial
review. The rate shall |
| 66 |
be deemed approved if the office does
not issue a notice of |
| 67 |
intent to approve or a notice of intent
to disapprove within 90 |
| 68 |
days after receipt of the filing. |
| 69 |
2. If
the filing is not made in accordance with the |
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provisions of
subparagraph 1., such filing shall be made as soon |
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as practicable, but
no later than 30 days after the effective |
| 72 |
date, and shall be
considered a "use and file" filing. An |
| 73 |
insurer making a
"use and file" filing is potentially subject to |
| 74 |
an order by the
office to return to policyholders portions of |
| 75 |
rates found to be
excessive, as provided in paragraph (h). |
| 76 |
2.3. For
all filings made on or before December 31, 2008, |
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an insurer seeking a rate that is
greater than the rate most |
| 78 |
recently approved by the office shall
make a "file and use" |
| 79 |
filing. |
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(h) In
the event the office finds that a rate or rate |
| 81 |
change is excessive, inadequate, or
unfairly discriminatory, the |
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office shall issue an order of
disapproval specifying that a new |
| 83 |
rate or rate schedule which responds to
the findings of the |
| 84 |
office be filed by the insurer. The
office shall further order, |
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for any "use and
file" filing made in accordance with |
| 86 |
subparagraph (a)2.,
that premiums charged each policyholder |
| 87 |
constituting the
portion of the rate above that which was |
| 88 |
actuarially justified
be returned to such policyholder in the |
| 89 |
form of a
credit or refund. If the office finds that an |
| 90 |
insurer's rate or rate change is
inadequate, the new rate or |
| 91 |
rate schedule filed with the office in
response to such a |
| 92 |
finding shall be applicable only to new
or renewal business of |
| 93 |
the insurer written on or after the
effective date of the |
| 94 |
responsive filing. |
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|
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The provisions of this subsection shall
not apply to workers' |
| 97 |
compensation and employer's liability
insurance and to motor |
| 98 |
vehicle insurance. |
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Section 4. Paragraphs
(a) and (b) of subsection (6) of |
| 100 |
section 627.351, Florida Statutes, as
amended by section 21 of |
| 101 |
chapter 2007-1, Laws of Florida, are
amended to read: |
| 102 |
627.351 Insurance
risk apportionment plans.-- |
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(6) CITIZENS
PROPERTY INSURANCE CORPORATION.-- |
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(a)1. The
Legislature finds that actual and threatened |
| 105 |
catastrophic losses to property in this
state from hurricanes |
| 106 |
have caused insurers to be unwilling or
unable to provide |
| 107 |
property insurance coverage to the
extent sought and needed. It |
| 108 |
is in the public interest and a public
purpose to assist in |
| 109 |
assuring that property in the state is
insured so as to |
| 110 |
facilitate the remediation,
reconstruction, and replacement of |
| 111 |
damaged or destroyed property in order
to reduce or avoid the |
| 112 |
negative effects otherwise resulting to
the public health, |
| 113 |
safety, and welfare; to the economy of
the state; and to the |
| 114 |
revenues of the state and local
governments needed to provide |
| 115 |
for the public welfare. It is necessary,
therefore, to provide |
| 116 |
property insurance to applicants who are
in good faith entitled |
| 117 |
to procure insurance through the
voluntary market but are unable |
| 118 |
to do so. The Legislature intends by
this subsection that |
| 119 |
property insurance be provided and that
it continues, as long as |
| 120 |
necessary, through an entity organized
to achieve efficiencies |
| 121 |
and economies, while providing service
to policyholders, |
| 122 |
applicants, and agents that is no less
than the quality |
| 123 |
generally provided in the voluntary
market, all toward the |
| 124 |
achievement of the foregoing public
purposes. Because it is |
| 125 |
essential for the corporation to have
the maximum financial |
| 126 |
resources to pay claims following a
catastrophic hurricane, it |
| 127 |
is the intent of the Legislature that
the income of the |
| 128 |
corporation be exempt from federal
income taxation and that |
| 129 |
interest on the debt obligations issued
by the corporation be |
| 130 |
exempt from federal income taxation. |
| 131 |
2. The
Residential Property and Casualty Joint |
| 132 |
Underwriting Association originally
created by this statute |
| 133 |
shall be known, as of July 1, 2002, as
the Citizens Property |
| 134 |
Insurance Corporation. The corporation
shall provide insurance |
| 135 |
for residential and commercial property,
for applicants who are |
| 136 |
in good faith entitled, but are unable,
to procure insurance |
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through the voluntary market. The
corporation shall operate |
| 138 |
pursuant to a plan of operation approved
by order of the |
| 139 |
Financial Services Commission. The plan
is subject to continuous |
| 140 |
review by the commission. The commission
may, by order, withdraw |
| 141 |
approval of all or part of a plan if the
commission determines |
| 142 |
that conditions have changed since
approval was granted and that |
| 143 |
the purposes of the plan require changes
in the plan. The |
| 144 |
corporation shall continue to operate
pursuant to the plan of |
| 145 |
operation approved by the Office of
Insurance Regulation until |
| 146 |
October 1, 2006. For the purposes of
this subsection, |
| 147 |
residential coverage includes both
personal lines residential |
| 148 |
coverage, which consists of the type of
coverage provided by |
| 149 |
homeowner's, mobile home owner's,
dwelling, tenant's, |
| 150 |
condominium unit owner's, and similar
policies, and commercial |
| 151 |
lines residential coverage, which
consists of the type of |
| 152 |
coverage provided by condominium
association, apartment |
| 153 |
building, and similar policies. |
| 154 |
3. For
the purposes of this subsection, the term |
| 155 |
"homestead
property" means: |
| 156 |
a. Property
that has been granted a homestead exemption |
| 157 |
under chapter 196; |
| 158 |
b. Property
for which the owner has a current, written |
| 159 |
lease with a renter
for a term of at least 7 months and for |
| 160 |
which the dwelling is
insured by the corporation for $200,000 or |
| 161 |
less; |
| 162 |
c. An
owner-occupied mobile home or manufactured home, as |
| 163 |
defined in s. 320.01,
which is permanently affixed to real |
| 164 |
property, is owned by
a Florida resident, and has been granted a |
| 165 |
homestead exemption
under chapter 196 or, if the owner does not |
| 166 |
own the real
property, the owner certifies that the mobile home |
| 167 |
or manufactured home
is his or her principal place of residence; |
| 168 |
d. Tenant's
coverage; |
| 169 |
e. Commercial
lines residential property; or |
| 170 |
f. Any
county, district, or municipal hospital; a hospital |
| 171 |
licensed by any
not-for-profit corporation qualified under s. |
| 172 |
501(c)(3) of the
United States Internal Revenue Code; or a |
| 173 |
continuing care
retirement community that is certified under |
| 174 |
chapter 651 and that
receives an exemption from ad valorem taxes |
| 175 |
under chapter 196. |
| 176 |
4. For
the purposes of this subsection, the term |
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"nonhomestead
property" means property that is not homestead |
| 178 |
property. |
| 179 |
3.5. Effective
July 1, 2008, a personal lines residential |
| 180 |
structure that has a dwelling
replacement cost of $1 million or |
| 181 |
more, or a single condominium unit that
has a combined dwelling |
| 182 |
and content replacement cost of $1
million or more is not |
| 183 |
eligible for coverage by the
corporation. Such dwellings insured |
| 184 |
by the corporation on June 30, 2008, may
continue to be covered |
| 185 |
by the corporation until the end of the
policy term. However, |
| 186 |
such dwellings that are insured by the
corporation and become |
| 187 |
ineligible for coverage due to the
provisions of this |
| 188 |
subparagraph may reapply and obtain
coverage in the high-risk |
| 189 |
account and be
considered "nonhomestead property" if the |
| 190 |
property owner provides the corporation
with a sworn affidavit |
| 191 |
from one or more insurance agents, on a
form provided by the |
| 192 |
corporation, stating that the agents
have made their best |
| 193 |
efforts to obtain coverage and that the
property has been |
| 194 |
rejected for coverage by at least one
authorized insurer and at |
| 195 |
least three surplus lines insurers. If
such conditions are met, |
| 196 |
the dwelling may be insured by the
corporation for up to 3 |
| 197 |
years, after which time the dwelling is
ineligible for coverage. |
| 198 |
The office shall approve the method used
by the corporation for |
| 199 |
valuing the dwelling replacement cost
for the purposes of this |
| 200 |
subparagraph. If a policyholder is
insured by the corporation |
| 201 |
prior to being determined to be
ineligible pursuant to this |
| 202 |
subparagraph and such policyholder files
a lawsuit challenging |
| 203 |
the determination, the policyholder may
remain insured by the |
| 204 |
corporation until the conclusion of the
litigation. |
| 205 |
4.6. For
properties constructed on or after January 1, |
| 206 |
2009, the corporation may not insure any
property located within |
| 207 |
2,500 feet landward of the coastal
construction control line |
| 208 |
created pursuant to s. 161.053 unless
the property meets the |
| 209 |
requirements of the code-plus building
standards developed by |
| 210 |
the Florida Building Commission. |
| 211 |
5.7. It
is the intent of the Legislature that |
| 212 |
policyholders, applicants, and agents of
the corporation receive |
| 213 |
service and treatment of the highest
possible level but never |
| 214 |
less than that generally provided in the
voluntary market. It |
| 215 |
also is intended that the corporation be
held to service |
| 216 |
standards no less than those applied to
insurers in the |
| 217 |
voluntary market by the office with
respect to responsiveness, |
| 218 |
timeliness, customer courtesy, and
overall dealings with |
| 219 |
policyholders, applicants, or agents of
the corporation. |
| 220 |
(b)1. All
insurers authorized to write one or more subject |
| 221 |
lines of business in this state are
subject to assessment by the |
| 222 |
corporation and, for the purposes of
this subsection, are |
| 223 |
referred to collectively as
"assessable insurers." Insurers |
| 224 |
writing one or more subject lines of
business in this state |
| 225 |
pursuant to part VIII of chapter 626 are
not assessable |
| 226 |
insurers, but insureds who procure one
or more subject lines of |
| 227 |
business in this state pursuant to part
VIII of chapter 626 are |
| 228 |
subject to assessment by the corporation
and are referred to |
| 229 |
collectively as "assessable
insureds." An authorized insurer's |
| 230 |
assessment liability shall begin on the
first day of the |
| 231 |
calendar year following the year in
which the insurer was issued |
| 232 |
a certificate of authority to transact
insurance for subject |
| 233 |
lines of business in this state and
shall terminate 1 year after |
| 234 |
the end of the first calendar year
during which the insurer no |
| 235 |
longer holds a certificate of authority
to transact insurance |
| 236 |
for subject lines of business in this
state. |
| 237 |
2.a. All
revenues, assets, liabilities, losses, and |
| 238 |
expenses of the corporation shall be
divided into three separate |
| 239 |
accounts as follows: |
| 240 |
(I) A
personal lines account for personal residential |
| 241 |
policies issued by the corporation or
issued by the Residential |
| 242 |
Property and Casualty Joint Underwriting
Association and renewed |
| 243 |
by the corporation that provide
comprehensive, multiperil |
| 244 |
coverage on risks that are not located
in areas eligible for |
| 245 |
coverage in the Florida Windstorm
Underwriting Association as |
| 246 |
those areas were defined on January 1,
2002, and for such |
| 247 |
policies that do not provide coverage
for the peril of wind on |
| 248 |
risks that are located in such areas; |
| 249 |
(II) A
commercial lines account for commercial residential |
| 250 |
and commercial nonresidential policies
issued by the corporation |
| 251 |
or issued by the Residential Property
and Casualty Joint |
| 252 |
Underwriting Association and renewed by
the corporation that |
| 253 |
provide coverage for basic property
perils on risks that are not |
| 254 |
located in areas eligible for coverage
in the Florida Windstorm |
| 255 |
Underwriting Association as those areas
were defined on January |
| 256 |
1, 2002, and for such policies that do
not provide coverage for |
| 257 |
the peril of wind on risks that are
located in such areas; and |
| 258 |
(III) A
high-risk account for personal residential |
| 259 |
policies and commercial residential and
commercial |
| 260 |
nonresidential property policies issued
by the corporation or |
| 261 |
transferred to the corporation that
provide coverage for the |
| 262 |
peril of wind on risks that are located
in areas eligible for |
| 263 |
coverage in the Florida Windstorm
Underwriting Association as |
| 264 |
those areas were defined on January 1,
2002. Subject to the |
| 265 |
approval of a business plan by the
Financial Services Commission |
| 266 |
and Legislative Budget Commission as
provided in this sub-sub- |
| 267 |
subparagraph, but no earlier than March
31, 2007, the |
| 268 |
corporation may offer policies that
provide multiperil coverage |
| 269 |
and the corporation shall continue to
offer policies that |
| 270 |
provide coverage only for the peril of
wind for risks located in |
| 271 |
areas eligible for coverage in the
high-risk account. In issuing |
| 272 |
multiperil coverage, the corporation may
use its approved policy |
| 273 |
forms and rates for the personal lines
account. An applicant or |
| 274 |
insured who is eligible to purchase a
multiperil policy from the |
| 275 |
corporation may purchase a multiperil
policy from an authorized |
| 276 |
insurer without prejudice to the
applicant's or insured's |
| 277 |
eligibility to prospectively purchase a
policy that provides |
| 278 |
coverage only for the peril of wind from
the corporation. An |
| 279 |
applicant or insured who is eligible for
a corporation policy |
| 280 |
that provides coverage only for the
peril of wind may elect to |
| 281 |
purchase or retain such policy and also
purchase or retain |
| 282 |
coverage excluding wind from an
authorized insurer without |
| 283 |
prejudice to the applicant's or
insured's eligibility to |
| 284 |
prospectively purchase a policy that
provides multiperil |
| 285 |
coverage from the corporation. It is the
goal of the Legislature |
| 286 |
that there would be an overall average
savings of 10 percent or |
| 287 |
more for a policyholder who currently
has a wind-only policy |
| 288 |
with the corporation, and an ex-wind
policy with a voluntary |
| 289 |
insurer or the corporation, and who then
obtains a multiperil |
| 290 |
policy from the corporation. It is the
intent of the Legislature |
| 291 |
that the offer of multiperil coverage in
the high-risk account |
| 292 |
be made and implemented in a manner that
does not adversely |
| 293 |
affect the tax-exempt status of the
corporation or |
| 294 |
creditworthiness of or security for
currently outstanding |
| 295 |
financing obligations or credit
facilities of the high-risk |
| 296 |
account, the personal lines account, or
the commercial lines |
| 297 |
account. By March 1, 2007, the
corporation shall prepare and |
| 298 |
submit for approval by the Financial
Services Commission and |
| 299 |
Legislative Budget Commission a report
detailing the |
| 300 |
corporation's business plan for issuing
multiperil coverage in |
| 301 |
the high-risk account. The business plan
shall be approved or |
| 302 |
disapproved within 30 days after
receipt, as submitted or |
| 303 |
modified and resubmitted by the
corporation. The business plan |
| 304 |
must include: the impact of such
multiperil coverage on the |
| 305 |
corporation's financial resources, the
impact of such multiperil |
| 306 |
coverage on the corporation's tax-exempt
status, the manner in |
| 307 |
which the corporation plans to implement
the processing of |
| 308 |
applications and policy forms for new
and existing |
| 309 |
policyholders, the impact of such
multiperil coverage on the |
| 310 |
corporation's ability to deliver
customer service at the high |
| 311 |
level required by this subsection, the
ability of the |
| 312 |
corporation to process claims, the
ability of the corporation to |
| 313 |
quote and issue policies, the impact of
such multiperil coverage |
| 314 |
on the corporation's agents, the impact
of such multiperil |
| 315 |
coverage on the corporation's existing
policyholders, and the |
| 316 |
impact of such multiperil coverage on
rates and premium. The |
| 317 |
high-risk account must also include
quota share primary |
| 318 |
insurance under subparagraph (c)2. The
area eligible for |
| 319 |
coverage under the high-risk account
also includes the area |
| 320 |
within Port Canaveral, which is bordered
on the south by the |
| 321 |
City of Cape Canaveral, bordered on the
west by the Banana |
| 322 |
River, and bordered on the north by
Federal Government property. |
| 323 |
b. The
three separate accounts must be maintained as long |
| 324 |
as financing obligations entered into by
the Florida Windstorm |
| 325 |
Underwriting Association or Residential
Property and Casualty |
| 326 |
Joint Underwriting Association are
outstanding, in accordance |
| 327 |
with the terms of the corresponding
financing documents. When |
| 328 |
the financing obligations are no longer
outstanding, in |
| 329 |
accordance with the terms of the
corresponding financing |
| 330 |
documents, the corporation may use a
single account for all |
| 331 |
revenues, assets, liabilities, losses,
and expenses of the |
| 332 |
corporation. Consistent with the
requirement of this |
| 333 |
subparagraph and prudent investment
policies that minimize the |
| 334 |
cost of carrying debt, the board shall
exercise its best efforts |
| 335 |
to retire existing debt or to obtain
approval of necessary |
| 336 |
parties to amend the terms of existing
debt, so as to structure |
| 337 |
the most efficient plan to consolidate
the three separate |
| 338 |
accounts into a single account. By
February 1, 2007, the board |
| 339 |
shall submit a report to the Financial
Services Commission, the |
| 340 |
President of the Senate, and the Speaker
of the House of |
| 341 |
Representatives which includes an
analysis of consolidating the |
| 342 |
accounts, the actions the board has
taken to minimize the cost |
| 343 |
of carrying debt, and its
recommendations for executing the most |
| 344 |
efficient plan. |
| 345 |
c. Creditors
of the Residential Property and Casualty |
| 346 |
Joint Underwriting Association shall
have a claim against, and |
| 347 |
recourse to, the accounts referred to in
sub-sub-subparagraphs |
| 348 |
a.(I) and (II) and shall have no claim
against, or recourse to, |
| 349 |
the account referred to in
sub-sub-subparagraph a.(III). |
| 350 |
Creditors of the Florida Windstorm
Underwriting Association |
| 351 |
shall have a claim against, and recourse
to, the account |
| 352 |
referred to in sub-sub-subparagraph
a.(III) and shall have no |
| 353 |
claim against, or recourse to, the
accounts referred to in sub- |
| 354 |
sub-subparagraphs a.(I) and (II). |
| 355 |
d. Revenues,
assets, liabilities, losses, and expenses not |
| 356 |
attributable to particular accounts
shall be prorated among the |
| 357 |
accounts. |
| 358 |
e. The
Legislature finds that the revenues of the |
| 359 |
corporation are revenues that are
necessary to meet the |
| 360 |
requirements set forth in documents
authorizing the issuance of |
| 361 |
bonds under this subsection. |
| 362 |
f. No
part of the income of the corporation may inure to |
| 363 |
the benefit of any private person. |
| 364 |
3. With
respect to a deficit in an account: |
| 365 |
a. When
the deficit incurred in a particular calendar year |
| 366 |
is not greater than 10 percent of the
aggregate statewide direct |
| 367 |
written premium for the subject lines of
business for the prior |
| 368 |
calendar year, the entire deficit shall
be recovered through |
| 369 |
regular assessments of assessable
insurers under paragraph (p) |
| 370 |
and assessable insureds. |
| 371 |
b. When
the deficit incurred in a particular calendar year |
| 372 |
exceeds 10 percent of the aggregate
statewide direct written |
| 373 |
premium for the subject lines of
business for the prior calendar |
| 374 |
year, the corporation shall levy regular
assessments on |
| 375 |
assessable insurers under paragraph (p)
and on assessable |
| 376 |
insureds in an amount equal to the
greater of 10 percent of the |
| 377 |
deficit or 10 percent of the aggregate
statewide direct written |
| 378 |
premium for the subject lines of
business for the prior calendar |
| 379 |
year. Any remaining deficit shall be
recovered through emergency |
| 380 |
assessments under sub-subparagraph d. |
| 381 |
c. Each
assessable insurer's share of the amount being |
| 382 |
assessed under sub-subparagraph a. or
sub-subparagraph b. shall |
| 383 |
be in the proportion that the assessable
insurer's direct |
| 384 |
written premium for the subject lines of
business for the year |
| 385 |
preceding the assessment bears to the
aggregate statewide direct |
| 386 |
written premium for the subject lines of
business for that year. |
| 387 |
The assessment percentage applicable to
each assessable insured |
| 388 |
is the ratio of the amount being
assessed under sub-subparagraph |
| 389 |
a. or sub-subparagraph b. to the
aggregate statewide direct |
| 390 |
written premium for the subject lines of
business for the prior |
| 391 |
year. Assessments levied by the
corporation on assessable |
| 392 |
insurers under sub-subparagraphs a. and
b. shall be paid as |
| 393 |
required by the corporation's plan of
operation and paragraph |
| 394 |
(p). Notwithstanding any other provision
of this subsection, the |
| 395 |
aggregate amount of a regular assessment
for a deficit incurred |
| 396 |
in a particular calendar year shall be
reduced by the estimated |
| 397 |
amount to be received by the corporation
from the Citizens |
| 398 |
policyholder surcharge under
subparagraph (c)11. and the amount |
| 399 |
collected or estimated to be collected
from the assessment on |
| 400 |
Citizens policyholders pursuant to
sub-subparagraph i. |
| 401 |
Assessments levied by the corporation on
assessable insureds |
| 402 |
under sub-subparagraphs a. and b. shall
be collected by the |
| 403 |
surplus lines agent at the time the
surplus lines agent collects |
| 404 |
the surplus lines tax required by s.
626.932 and shall be paid |
| 405 |
to the Florida Surplus Lines Service
Office at the time the |
| 406 |
surplus lines agent pays the surplus
lines tax to the Florida |
| 407 |
Surplus Lines Service Office. Upon
receipt of regular |
| 408 |
assessments from surplus lines agents,
the Florida Surplus Lines |
| 409 |
Service Office shall transfer the
assessments directly to the |
| 410 |
corporation as determined by the
corporation. |
| 411 |
d. Upon
a determination by the board of governors that a |
| 412 |
deficit in an account exceeds the amount
that will be recovered |
| 413 |
through regular assessments under
sub-subparagraph a. or sub- |
| 414 |
subparagraph b., the board shall levy,
after verification by the |
| 415 |
office, emergency assessments, for as
many years as necessary to |
| 416 |
cover the deficits, to be collected by
assessable insurers and |
| 417 |
the corporation and collected from
assessable insureds upon |
| 418 |
issuance or renewal of policies for
subject lines of business, |
| 419 |
excluding National Flood Insurance
policies. The amount of the |
| 420 |
emergency assessment collected in a
particular year shall be a |
| 421 |
uniform percentage of that year's direct
written premium for |
| 422 |
subject lines of business and all
accounts of the corporation, |
| 423 |
excluding National Flood Insurance
Program policy premiums, as |
| 424 |
annually determined by the board and
verified by the office. The |
| 425 |
office shall verify the arithmetic
calculations involved in the |
| 426 |
board's determination within 30 days
after receipt of the |
| 427 |
information on which the determination
was based. |
| 428 |
Notwithstanding any other provision of
law, the corporation and |
| 429 |
each assessable insurer that writes
subject lines of business |
| 430 |
shall collect emergency assessments from
its policyholders |
| 431 |
without such obligation being affected
by any credit, |
| 432 |
limitation, exemption, or deferment.
Emergency assessments |
| 433 |
levied by the corporation on assessable
insureds shall be |
| 434 |
collected by the surplus lines agent at
the time the surplus |
| 435 |
lines agent collects the surplus lines
tax required by s. |
| 436 |
626.932 and shall be paid to the Florida
Surplus Lines Service |
| 437 |
Office at the time the surplus lines
agent pays the surplus |
| 438 |
lines tax to the Florida Surplus Lines
Service Office. The |
| 439 |
emergency assessments so collected shall
be transferred directly |
| 440 |
to the corporation on a periodic basis
as determined by the |
| 441 |
corporation and shall be held by the
corporation solely in the |
| 442 |
applicable account. The aggregate amount
of emergency |
| 443 |
assessments levied for an account under
this sub-subparagraph in |
| 444 |
any calendar year may not exceed the
greater of 10 percent of |
| 445 |
the amount needed to cover the original
deficit, plus interest, |
| 446 |
fees, commissions, required reserves,
and other costs associated |
| 447 |
with financing of the original deficit,
or 10 percent of the |
| 448 |
aggregate statewide direct written
premium for subject lines of |
| 449 |
business and for all accounts of the
corporation for the prior |
| 450 |
year, plus interest, fees, commissions,
required reserves, and |
| 451 |
other costs associated with financing
the original deficit. |
| 452 |
e. The
corporation may pledge the proceeds of assessments, |
| 453 |
projected recoveries from the Florida
Hurricane Catastrophe |
| 454 |
Fund, other insurance and reinsurance
recoverables, policyholder |
| 455 |
surcharges and other surcharges, and
other funds available to |
| 456 |
the corporation as the source of revenue
for and to secure bonds |
| 457 |
issued under paragraph (p), bonds or
other indebtedness issued |
| 458 |
under subparagraph (c)3., or lines of
credit or other financing |
| 459 |
mechanisms issued or created under this
subsection, or to retire |
| 460 |
any other debt incurred as a result of
deficits or events giving |
| 461 |
rise to deficits, or in any other way
that the board determines |
| 462 |
will efficiently recover such deficits.
The purpose of the lines |
| 463 |
of credit or other financing mechanisms
is to provide additional |
| 464 |
resources to assist the corporation in
covering claims and |
| 465 |
expenses attributable to a catastrophe.
As used in this |
| 466 |
subsection, the term
"assessments" includes regular assessments |
| 467 |
under sub-subparagraph a.,
sub-subparagraph b., or subparagraph |
| 468 |
(p)1. and emergency assessments under
sub-subparagraph d. |
| 469 |
Emergency assessments collected under
sub-subparagraph d. are |
| 470 |
not part of an insurer's rates, are not
premium, and are not |
| 471 |
subject to premium tax, fees, or
commissions; however, failure |
| 472 |
to pay the emergency assessment shall be
treated as failure to |
| 473 |
pay premium. The emergency assessments
under sub-subparagraph d. |
| 474 |
shall continue as long as any bonds
issued or other indebtedness |
| 475 |
incurred with respect to a deficit for
which the assessment was |
| 476 |
imposed remain outstanding, unless
adequate provision has been |
| 477 |
made for the payment of such bonds or
other indebtedness |
| 478 |
pursuant to the documents governing such
bonds or other |
| 479 |
indebtedness. |
| 480 |
f. As
used in this subsection, the term "subject lines of |
| 481 |
business" means insurance written
by assessable insurers or |
| 482 |
procured by assessable insureds for all
property and casualty |
| 483 |
lines of business in this state, but not
including workers' |
| 484 |
compensation or medical malpractice. As
used in the sub- |
| 485 |
subparagraph, the term "property
and casualty lines of business" |
| 486 |
includes all lines of business
identified on Form 2, Exhibit of |
| 487 |
Premiums and Losses, in the annual
statement required of |
| 488 |
authorized insurers by s. 624.424 and
any rule adopted under |
| 489 |
this section, except for those lines
identified as accident and |
| 490 |
health insurance and except for policies
written under the |
| 491 |
National Flood Insurance Program or the
Federal Crop Insurance |
| 492 |
Program. For purposes of this
sub-subparagraph, the term |
| 493 |
"workers' compensation"
includes both workers' compensation |
| 494 |
insurance and excess workers'
compensation insurance. |
| 495 |
g. The
Florida Surplus Lines Service Office shall |
| 496 |
determine annually the aggregate
statewide written premium in |
| 497 |
subject lines of business procured by
assessable insureds and |
| 498 |
shall report that information to the
corporation in a form and |
| 499 |
at a time the corporation specifies to
ensure that the |
| 500 |
corporation can meet the requirements of
this subsection and the |
| 501 |
corporation's financing obligations. |
| 502 |
h. The
Florida Surplus Lines Service Office shall verify |
| 503 |
the proper application by surplus lines
agents of assessment |
| 504 |
percentages for regular assessments and
emergency assessments |
| 505 |
levied under this subparagraph on
assessable insureds and shall |
| 506 |
assist the corporation in ensuring the
accurate, timely |
| 507 |
collection and payment of assessments by
surplus lines agents as |
| 508 |
required by the corporation. |
| 509 |
i. If
a deficit is incurred in any account in 2008 or |
| 510 |
thereafter, the board of governors shall
levy an immediate |
| 511 |
assessment against the premium of each nonhomestead
property |
| 512 |
policyholder in that
account all accounts of the
corporation, as |
| 513 |
a uniform percentage of the premium of
the policy of up to 10 |
| 514 |
percent of such premium, which funds
shall be used to offset the |
| 515 |
deficit. If this assessment is
insufficient to eliminate the |
| 516 |
deficit, the board of governors shall
levy an additional |
| 517 |
assessment against all remaining
policyholders of the |
| 518 |
corporation, which shall be collected at
the time of issuance or |
| 519 |
renewal of a policy, as a uniform
percentage of the premium for |
| 520 |
the policy of up to 10 percent of such
premium, which funds |
| 521 |
shall be used to further offset the
deficit. |
| 522 |
j. The
board of governors shall maintain separate |
| 523 |
accounting records
that consolidate data for nonhomestead |
| 524 |
properties,
including, but not limited to, number of policies, |
| 525 |
insured values,
premiums written, and losses. The board of |
| 526 |
governors shall
annually report to the office and the |
| 527 |
Legislature a summary
of such data. |
| 528 |
Section 5. Section
627.70185, Florida Statutes, is created |
| 529 |
to read: |
| 530 |
627.70185 Standards
for determining risk of coverage.--In |
| 531 |
determining the risk
of providing property insurance coverage, |
| 532 |
an insurer may not
deny coverage solely on the basis of the age |
| 533 |
of the property and
shall consider the wind resistance of the |
| 534 |
structure and
measures undertaken by the owner to protect the |
| 535 |
property against
hurricane loss. |
| 536 |
Section 6. This
act shall take effect July 1, 2007. |