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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
A bill to be entitled 1
An act relating to Citizens Property Insurance 2
Corporation; amending s. 627.021, F.S.; revising 3
applicability; amending s. 627.351, F.S.; deleting 4
obsolete language; requiring the Office of Insurance 5
Regulation to approve the method used by Citizens 6
Property Insurance Corporation for valuing the 7
dwelling replacement costs; specifying that a 8
registered lobbyist may not be a member of the 9
corporation's board of governors; specifying 10
qualification requirements for certain members of the 11
corporation's board of governors at the time of 12
appointment and reappointment; revising thresholds for 13
determining eligibility of a risk for coverage by the 14
corporation; providing that policyholders removed from 15
the corporation through an assumption agreement do not 16
remain eligible for coverage from the corporation; 17
requiring that policies of such policyholders remain 18
on the corporation's policy forms for a specified 19
time; eliminating costs of reinsurance in rates under 20
certain circumstances; making technical changes; 21
specifying the qualifications for an appointee as the 22
executive director of the corporation; specifying that 23
only the corporation's transfer of a policy file to an 24
insurer, rather than the transfer of any file, changes 25
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the file's public record status; providing thres holds 26
for determining eligibility for coverage by the 27
corporation for policyholders who receive take -out 28
offers from authorized insurers; revising the notice 29
that must be provided by the corporation when insurers 30
request to take out a policy; amending s. 6 27.3517, 31
F.S.; making technical changes; amending s. 627.3518, 32
F.S.; deleting obsolete provisions relating to the 33
purpose of the corporation's clearinghouse program and 34
reporting requirements; revising procedures for 35
determining eligibility of a risk for c overage with 36
the corporation; deleting provisions relating to 37
renewal status for coverage by the corporation; 38
providing an effective date. 39
40
Be It Enacted by the Legislature of the State of Florida: 41
42
Section 1. Subsection (2) of section 627.021, Flo rida 43
Statutes, is amended to read: 44
627.021 Scope of this part. — 45
(2) This part does not apply to: 46
(a) Reinsurance, except joint reinsurance as provided in 47
s. 627.311. 48
(b) Insurance against loss of or damage to aircraft, their 49
hulls, accessories, or equipment, or against liability, other 50
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than workers' compensation and employer's liability, arising out 51
of the ownership, maintenance, or use of aircraft. 52
(c) Insurance of vessels or craft, their cargoes, marine 53
builders' risks, marine protection and ind emnity, or other risks 54
commonly insured under marine insurance policies. 55
(d) Commercial inland marine insurance. 56
(e) Except as may be specifically stated to apply, surplus 57
lines insurance placed under the provisions of ss. 626.913-58
626.937. 59
Section 2. Paragraphs (a), (c), (d), (n), (x), and (ii) of 60
subsection (6) of section 627.351, Florida Statutes, are amended 61
to read: 62
627.351 Insurance risk apportionment plans. — 63
(6) CITIZENS PROPERTY INSURANCE CORPORATION. — 64
(a) The public purpose of this sub section is to ensure 65
that there is an orderly market for property insurance for 66
residents and businesses of this state. 67
1. The Legislature finds that private insurers are 68
unwilling or unable to provide affordable property insurance 69
coverage in this state to the extent sought and needed. The 70
absence of affordable property insurance threatens the public 71
health, safety, and w elfare and likewise threatens the economic 72
health of the state. The state therefore has a compelling public 73
interest and a public purpose to assist in assuring that 74
property in the state is insured and that it is insured at 75
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affordable rates so as to facili tate the remediation, 76
reconstruction, and replacement of damaged or destroyed property 77
in order to reduce or avoid the negative effects otherwise 78
resulting to the public health, safety, and welfare, to the 79
economy of the state, and to the revenues of the s tate and local 80
governments which are needed to provide for the public welfare. 81
It is necessary, therefore, to provide affordable property 82
insurance to applicants who are in good faith entitled to 83
procure insurance through the voluntary market but are unabl e to 84
do so. The Legislature intends, therefore, that affordable 85
property insurance be provided and that it continue to be 86
provided, as long as necessary, through Citizens Property 87
Insurance Corporation, a government entity that is an integral 88
part of the state, and that is not a private insurance company. 89
To that end, the corporation shall strive to increase the 90
availability of affordable property insurance in this state, 91
while achieving efficiencies and economies, and while providing 92
service to policyholde rs, applicants, and agents which is no 93
less than the quality generally provided in the voluntary 94
market, for the achievement of the foregoing public purposes. 95
Because it is essential for this government entity to have the 96
maximum financial resources to pay claims following a 97
catastrophic hurricane, it is the intent of the Legislature that 98
the corporation continue to be an integral part of the state and 99
that the income of the corporation be exempt from federal income 100
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taxation and that interest on the debt ob ligations issued by the 101
corporation be exempt from federal income taxation. 102
2. The Residential Property and Casualty Joint 103
Underwriting Association originally created by this statute 104
shall be known as the Citizens Property Insurance Corporation. 105
The corporation shall provide insurance for residential and 106
commercial property, for applicants who are entitled, but, in 107
good faith, are unable to procure insurance through the 108
voluntary market. The corporation shall operate pursuant to a 109
plan of operation approv ed by order of the Financial Services 110
Commission. The plan is subject to continuous review by the 111
commission. The commission may, by order, withdraw approval of 112
all or part of a plan if the commission determines that 113
conditions have changed since approval was granted and that the 114
purposes of the plan require changes in the plan. For the 115
purposes of this subsection, residential coverage includes both 116
personal lines residential coverage, which consists of the type 117
of coverage provided by homeowner, mobile hom e owner, dwelling, 118
tenant, condominium unit owner, and similar policies; and 119
commercial lines residential coverage, which consists of the 120
type of coverage provided by condominium association, apartment 121
building, and similar policies. 122
3. With respect to c overage for personal lines residential 123
structures,: 124
a. Effective January 1, 2014, a structure that has a 125
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dwelling replacement cost of $1 million or more, or a single 126
condominium unit that has a combined dwelling and contents 127
replacement cost of $1 millio n or more, is not eligible for 128
coverage by the corporation. Such dwellings insured by the 129
corporation on December 31, 2013, may continue to be covered by 130
the corporation until the end of the policy term. The office 131
shall approve the method used by the corp oration for valuing the 132
dwelling replacement cost for the purposes of this subparagraph. 133
If a policyholder is insured by the corporation before being 134
determined to be ineligible pursuant to this subparagraph and 135
such policyholder files a lawsuit challengin g the determination, 136
the policyholder may remain insured by the corporation until the 137
conclusion of the litigation. 138
b. Effective January 1, 2015, a structure that has a 139
dwelling replacement cost of $900,000 or more, or a single 140
condominium unit that has a combined dwelling and contents 141
replacement cost of $900,000 or more, is not eligible for 142
coverage by the corporation. Such dwellings insured by the 143
corporation on December 31, 2014, may continue to be covered by 144
the corporation only until the end of the policy term. 145
c. Effective January 1, 2016, a structure that has a 146
dwelling replacement cost of $800,000 or more, or a single 147
condominium unit that has a combined dwelling and contents 148
replacement cost of $800,000 or more, is not eligible for 149
coverage by the corporation. Such dwellings insured by the 150
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corporation on December 31, 2015, may continue to be covered by 151
the corporation until the end of the policy term. 152
d. effective January 1, 2017, a structure that has a 153
dwelling replacement cost of $700,000 or more, or a single 154
condominium unit that has a combined dwelling and contents 155
replacement cost of $700,000 or more, is not eligible for 156
coverage by the corporation. The office shall approve the method 157
used by the corporation for valuing the dwelling replac ement 158
cost Such dwellings insured by the corporation on December 31, 159
2016, may continue to be covered by the corporation until the 160
end of the policy term . The requirements of this subparagraph 161
sub-subparagraphs b.-d. do not apply in counties where the 162
office determines there is not a reasonable degree of 163
competition. In such counties a personal lines residential 164
structure that has a dwelling replacement cost of less than $1 165
million, or a single condominium unit that has a combined 166
dwelling and contents repl acement cost of less than $1 million, 167
is eligible for coverage by the corporation. 168
4. It is the intent of the Legislature that policyholders, 169
applicants, and agents of the corporation receive service and 170
treatment of the highest possible level but never less than that 171
generally provided in the voluntary market. It is also intended 172
that the corporation be held to service standards no less than 173
those applied to insurers in the voluntary market by the office 174
with respect to responsiveness, timeliness, custom er courtesy, 175
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and overall dealings with policyholders, applicants, or agents 176
of the corporation. 177
5.a. Effective January 1, 2009, a personal lines 178
residential structure that is located in the "wind -borne debris 179
region," as defined in s. 1609.2, Internation al Building Code 180
(2006), and that has an insured value on the structure of 181
$750,000 or more is not eligible for coverage by the corporation 182
unless the structure has opening protections as required under 183
the Florida Building Code for a newly constructed res idential 184
structure in that area. A residential structure is deemed to 185
comply with this sub -subparagraph if it has shutters or opening 186
protections on all openings and if such opening protections 187
complied with the Florida Building Code at the time they were 188
installed. 189
b. Any major structure, as defined in s. 161.54(6)(a), 190
that is newly constructed, or rebuilt, repaired, restored, or 191
remodeled to increase the total square footage of finished area 192
by more than 25 percent, pursuant to a permit applied for afte r 193
July 1, 2015, is not eligible for coverage by the corporation if 194
the structure is seaward of the coastal construction control 195
line established pursuant to s. 161.053 or is within the Coastal 196
Barrier Resources System as designated by 16 U.S.C. ss. 3501 -197
3510. 198
6. With respect to wind -only coverage for commercial lines 199
residential condominiums, effective July 1, 2014, a condominium 200
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shall be deemed ineligible for coverage if 50 percent or more of 201
the units are rented more than eight times in a calendar year 202
for a rental agreement period of less than 30 days. 203
(c) The corporation's plan of operation: 204
1. Must provide for adoption of residential property and 205
casualty insurance policy forms and commercial residential and 206
nonresidential property insurance forms , which must be approved 207
by the office before use. The corporation shall adopt the 208
following policy forms: 209
a. Standard personal lines policy forms that are 210
comprehensive multiperil policies providing full coverage of a 211
residential property equivalent to the coverage provided in the 212
private insurance market under an HO -3, HO-4, or HO-6 policy. 213
b. Basic personal lines policy forms that are policies 214
similar to an HO-8 policy or a dwelling fire policy that provide 215
coverage meeting the requirements of the se condary mortgage 216
market, but which is more limited than the coverage under a 217
standard policy. 218
c. Commercial lines residential and nonresidential policy 219
forms that are generally similar to the basic perils of full 220
coverage obtainable for commercial reside ntial structures and 221
commercial nonresidential structures in the admitted voluntary 222
market. 223
d. Personal lines and commercial lines residential 224
property insurance forms that cover the peril of wind only. The 225
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forms are applicable only to residential proper ties located in 226
areas eligible for coverage under the coastal account referred 227
to in sub-subparagraph (b)2.a. 228
e. Commercial lines nonresidential property insurance 229
forms that cover the peril of wind only. The forms are 230
applicable only to nonresidential p roperties located in areas 231
eligible for coverage under the coastal account referred to in 232
sub-subparagraph (b)2.a. 233
f. The corporation may adopt variations of the policy 234
forms listed in sub-subparagraphs a.-e. which contain more 235
restrictive coverage. 236
g. Effective January 1, 2013, the corporation shall offer 237
a basic personal lines policy similar to an HO -8 policy with 238
dwelling repair based on common construction materials and 239
methods. 240
2. Must provide that the corporation adopt a program in 241
which the corporation and authorized insurers enter into quota 242
share primary insurance agreements for hurricane coverage, as 243
defined in s. 627.4025(2)(a), for eligible risks, and adopt 244
property insurance forms for eligible risks which cover the 245
peril of wind only. 246
a. As used in this subsection, the term: 247
(I) "Quota share primary insurance" means an arrangement 248
in which the primary hurricane coverage of an eligible risk is 249
provided in specified percentages by the corporation and an 250
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authorized insurer. The corporation and authorized insurer are 251
each solely responsible for a specified percentage of hurricane 252
coverage of an eligible risk as set forth in a quota share 253
primary insurance agreement between the corporation and an 254
authorized insurer and the insurance contract. The 255
responsibility of the corporation or authorized insurer to pay 256
its specified percentage of hurricane losses of an eligible 257
risk, as set forth in the agreement, may not be altered by the 258
inability of the other party to pay its specified percentage of 259
losses. Eligible risks that are provided hurricane coverage 260
through a quota share primary insurance arrangement must be 261
provided policy forms that set forth the obligations of the 262
corporation and authorized insurer under the arrangement, 263
clearly specify the percentages of quota share primary insurance 264
provided by the corporation and authorized insurer, and 265
conspicuously and clearly state that the authorized insurer and 266
the corporation may not be held responsible beyond their 267
specified percentage of coverage of hurricane losses. 268
(II) "Eligible risks" means personal lines residential and 269
commercial lines residential risks that meet the underwriting 270
criteria of the corporation and are located in areas that were 271
eligible for coverage by the Florida Windstorm Un derwriting 272
Association on January 1, 2002. 273
b. The corporation may enter into quota share primary 274
insurance agreements with authorized insurers at corporation 275
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coverage levels of 90 percent and 50 percent. 276
c. If the corporation determines that additional coverage 277
levels are necessary to maximize participation in quota share 278
primary insurance agreements by authorized insurers, the 279
corporation may establish additional coverage levels. However, 280
the corporation's quota share primary insurance coverage level 281
may not exceed 90 percent. 282
d. Any quota share primary insurance agreement entered 283
into between an authorized insurer and the corporation must 284
provide for a uniform specified percentage of coverage of 285
hurricane losses, by county or territory as set forth b y the 286
corporation board, for all eligible risks of the authorized 287
insurer covered under the agreement. 288
e. Any quota share primary insurance agreement entered 289
into between an authorized insurer and the corporation is 290
subject to review and approval by the office. However, such 291
agreement shall be authorized only as to insurance contracts 292
entered into between an authorized insurer and an insured who is 293
already insured by the corporation for wind coverage. 294
f. For all eligible risks covered under quota share 295
primary insurance agreements, the exposure and coverage levels 296
for both the corporation and authorized insurers shall be 297
reported by the corporation to the Florida Hurricane Catastrophe 298
Fund. For all policies of eligible risks covered under such 299
agreements, the corporation and the authorized insurer must 300
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maintain complete and accurate records for the purpose of 301
exposure and loss reimbursement audits as required by fund 302
rules. The corporation and the authorized insurer shall each 303
maintain duplicate copies of policy declaration pages and 304
supporting claims documents. 305
g. The corporation board shall establish in its plan of 306
operation standards for quota share agreements which ensure that 307
there is no discriminatory application among insurers as to the 308
terms of the agreements, pricing of the agreements, incentive 309
provisions if any, and consideration paid for servicing policies 310
or adjusting claims. 311
h. The quota share primary insurance agreement between the 312
corporation and an authorized insurer must set forth the 313
specific terms under which coverage is provided, including, but 314
not limited to, the sale and servicing of policies issued under 315
the agreement by the insurance agent of the authorized insurer 316
producing the business, the reporting of information concerning 317
eligible risks, the payment of premium to the corporation, and 318
arrangements for the adjustment and payment of hurricane claims 319
incurred on eligible risks by the claims adjuster and personnel 320
of the authorized insurer. Entering into a quota sharing 321
insurance agreement between the corporation and an authorized 322
insurer is voluntary and at the discretion of the authorized 323
insurer. 324
3. May provide that the corporation may employ or 325
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otherwise contract with individuals or other entities to provide 326
administrative or professional services that may be appropriate 327
to effectuate the plan. The corporation may borrow funds by 328
issuing bonds or by incurring other indebtedness, and shall have 329
other powers reasonably necessary to effectuate the requirements 330
of this subsection, including, without limitation, the power to 331
issue bonds and incur other indebtedness in order to refinance 332
outstanding bonds or other indebtedness. The corporation may 333
seek judicial validation of its bonds or other indebtedness 334
under chapter 75. The cor poration may issue bonds or incur other 335
indebtedness, or have bonds issued on its behalf by a unit of 336
local government pursuant to subparagraph (q)2. in the absence 337
of a hurricane or other weather -related event, upon a 338
determination by the corporation, sub ject to approval by the 339
office, that such action would enable it to efficiently meet the 340
financial obligations of the corporation and that such 341
financings are reasonably necessary to effectuate the 342
requirements of this subsection. The corporation may take all 343
actions needed to facilitate tax -free status for such bonds or 344
indebtedness, including formation of trusts or other affiliated 345
entities. The corporation may pledge assessments, projected 346
recoveries from the Florida Hurricane Catastrophe Fund, other 347
reinsurance recoverables, policyholder surcharges and other 348
surcharges, and other funds available to the corporation as 349
security for bonds or other indebtedness. In recognition of s. 350
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10, Art. I of the State Constitution, prohibiting the impairment 351
of obligations of contracts, it is the intent of the Legislature 352
that no action be taken whose purpose is to impair any bond 353
indenture or financing agreement or any revenue source committed 354
by contract to such bond or other indebtedness. 355
4. Must require that the co rporation operate subject to 356
the supervision and approval of a board of governors consisting 357
of nine individuals who are residents of this state and who are 358
from different geographical areas of this the state, one of whom 359
is appointed by the Governor and s erves solely to advocate on 360
behalf of the consumer. The appointment of a consumer 361
representative by the Governor is deemed to be within the scope 362
of the exemption provided in s. 112.313(7)(b) and is in addition 363
to the appointments authorized under sub -subparagraph a. A 364
registered lobbyist for the executive or legislative branch may 365
not be a member of the board. 366
a. The Governor, the Chief Financial Officer, the 367
President of the Senate, and the Speaker of the House of 368
Representatives shall each appoint two members of the board. At 369
least one of the two members appointed by each appointing 370
officer must have demonstrated expertise in insurance and be 371
deemed to be within the scope of the exemption provided in s. 372
112.313(7)(b) at the time of appointment or reappo intment. The 373
Chief Financial Officer shall designate one of the appointees as 374
chair. All board members serve at the pleasure of the appointing 375
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officer. All members of the board are subject to removal at will 376
by the officers who appointed them. All board me mbers, including 377
the chair, must be appointed to serve for 3 -year terms beginning 378
annually on a date designated by the plan. However, for the 379
first term beginning on or after July 1, 2009, each appointing 380
officer shall appoint one member of the board for a 2-year term 381
and one member for a 3 -year term. A board vacancy shall be 382
filled for the unexpired term by the appointing officer. The 383
Chief Financial Officer shall appoint a technical advisory group 384
to provide information and advice to the board in connecti on 385
with the board's duties under this subsection. The executive 386
director and senior managers of the corporation shall be engaged 387
by the board and serve at the pleasure of the board. Any 388
executive director appointed on or after July 1, 2006, is 389
subject to confirmation by the Senate. The executive director is 390
responsible for employing other staff as the corporation may 391
require, subject to review and concurrence by the board. 392
b. The board shall create a Market Accountability Advisory 393
Committee to assist the corporation in developing awareness of 394
its rates and its customer and agent service levels in 395
relationship to the voluntary market insurers writing similar 396
coverage. 397
(I) The members of the advisory committee consist of the 398
following 11 persons, one of w hom must be elected chair by the 399
members of the committee: four representatives, one appointed by 400
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the Florida Association of Insurance Agents, one by the Florida 401
Association of Insurance and Financial Advisors, one by the 402
Professional Insurance Agents of F lorida, and one by the Latin 403
American Association of Insurance Agencies; three 404
representatives appointed by the insurers with the three highest 405
voluntary market share of residential property insurance 406
business in this the state; one representative from the Office 407
of Insurance Regulation; one consumer appointed by the board who 408
is insured by the corporation at the time of appointment to the 409
committee; one representative appointed by the Florida 410
Association of Realtors; and one representative appointed by the 411
Florida Bankers Association. All members shall be appointed to 412
3-year terms and may serve for consecutive terms. 413
(II) The committee shall report to the corporation at each 414
board meeting on insurance market issues that which may include 415
rates and rate competition with the voluntary market; service, 416
including policy issuance, claims processing, and general 417
responsiveness to policyholders, applicants, and agents; and 418
matters relating to depopulation. 419
5. Must provide a procedure for determining the 420
eligibility of a risk for coverage, as follows: 421
a. Subject to s. 627.3517, with respect to personal lines 422
residential risks, if the risk is offered coverage from an 423
authorized insurer at the insurer's approved rate under a 424
standard policy including wind coverag e or, if consistent with 425
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the insurer's underwriting rules as filed with the office, a 426
basic policy including wind coverage, for a new application to 427
the corporation for coverage, the risk is not eligible for any 428
policy issued by the corporation unless the premium for coverage 429
from the authorized insurer is more than 20 percent greater than 430
the premium for comparable coverage from the corporation. 431
(I) Whenever an offer of coverage for a personal lines 432
residential risk is received for a policyholder of the 433
corporation at renewal from an authorized insurer, if the offer 434
is equal to or less than the corporation's renewal premium for 435
comparable coverage, the risk is not eligible for coverage with 436
the corporation unless the premium for coverage from the 437
authorized insurer is more than the following percent greater 438
than the renewal premium for comparable coverage from the 439
corporation: 440
(A) Four percent for policies that renew during 2023. 441
(B) Eight percent for policies that renew during 2024. 442
(C) Twelve percent for policies that renew during 2025. 443
(D) Sixteen percent for polices that renew during 2026. 444
(E) Twenty percent for policies that renew during 2027 and 445
during all subsequent years . 446
447
If the risk is not able to obtain such offers offer, the risk is 448
eligible for a standard policy including wind coverage or a 449
basic policy including wind coverage issued by the corporation; 450
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however, if the risk could not be insured under a standard 451
policy including wind coverage regardless of market conditions, 452
the risk is eligible for a basic policy including wind coverage 453
unless rejected under subparagraph 8. However, a policyholder 454
removed from the corporation through an assumption agreement 455
remains eligible for coverage from the corporation until the end 456
of the assumption period. The corporation shall determine the 457
type of policy to be provided on the basis of objective 458
standards specified in the underwriting manual and based on 459
generally accepted underwriting practices. A policyholder 460
removed from the corporation throug h an assumption agreement 461
does not remain eligible for coverage from the corporation 462
beyond the end of the policy term. However, any policy removed 463
from the corporation through an assumption agreement remains on 464
the corporation's policy forms through the e nd of the policy 465
term. 466
(II)(I) If the risk accepts an offer of coverage through 467
the market assistance plan or through a mechanism established by 468
the corporation other than a plan established by s. 627.3518, 469
before a policy is issued to the risk by the co rporation or 470
during the first 30 days of coverage by the corporation, and the 471
producing agent who submitted the application to the plan or to 472
the corporation is not currently appointed by the insurer, the 473
insurer shall: 474
(A) Pay to the producing agent of record of the policy for 475
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the first year, an amount that is the greater of the insurer's 476
usual and customary commission for the type of policy written or 477
a fee equal to the usual and customary commission of the 478
corporation; or 479
(B) Offer to allow the produ cing agent of record of the 480
policy to continue servicing the policy for at least 1 year and 481
offer to pay the agent the greater of the insurer's or the 482
corporation's usual and customary commission for the type of 483
policy written. 484
485
If the producing agent is u nwilling or unable to accept 486
appointment, the new insurer shall pay the agent in accordance 487
with sub-sub-sub-subparagraph (A). 488
(III)(II) If the corporation enters into a contractual 489
agreement for a take -out plan, the producing agent of record of 490
the corporation policy is entitled to retain any unearned 491
commission on the policy, and the insurer shall: 492
(A) Pay to the producing agent of record, for the first 493
year, an amount that is the greater of the insurer's usual and 494
customary commission for the type of policy written or a fee 495
equal to the usual and customary commission of the corporation; 496
or 497
(B) Offer to allow the producing agent of record to 498
continue servicing the policy for at least 1 year and offer to 499
pay the agent the greater of the insurer's or t he corporation's 500
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usual and customary commission for the type of policy written. 501
502
If the producing agent is unwilling or unable to accept 503
appointment, the new insurer shall pay the agent in accordance 504
with sub-sub-sub-subparagraph (A). 505
b. With respect to commercial lines residential risks, for 506
a new application to the corporation for coverage, if the risk 507
is offered coverage under a policy including wind coverage from 508
an authorized insurer at its approved rate, the risk is not 509
eligible for a policy issued by the corporation unless the 510
premium for coverage from the authorized insurer is more than 20 511
15 percent greater than the premium for comparable coverage from 512
the corporation. 513
(I) Whenever an offer of coverage for a commercial lines 514
residential risk is received for a policyholder of the 515
corporation at renewal from an authorized insurer, if the offer 516
is equal to or less than the corporation's renewal premium for 517
comparable coverage, the risk is not eligible for coverage with 518
the corporation unless the premium for coverage from the 519
authorized insurer is more than the following percent greater 520
than the renewal premium for comparable coverage from the 521
corporation: 522
(A) Four percent for policies that renew during 2023. 523
(B) Eight percent for policies that renew during 2024. 524
(C) Twelve percent for policies that renew during 2025. 525
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(D) Sixteen percent for policies that renew during 2026. 526
(E) Twenty percent for policies that renew during 2027 and 527
during all subsequent years . 528
529
If the risk is not able to obtain any such offers offer, the 530
risk is eligible for a policy including wind coverage issued by 531
the corporation. However, A policyholder removed from the 532
corporation through an assu mption agreement does not remain 533
remains eligible for coverage from the corporation beyond the 534
end of the policy term until the end of the assumption period . 535
However, any policy removed from the corporation through an 536
assumption agreement remains on the co rporation's policy forms 537
through the end of the policy term. 538
(II)(I) If the risk accepts an offer of coverage through 539
the market assistance plan or through a mechanism established by 540
the corporation other than a plan established by s. 627.3518, 541
before a policy is issued to the risk by the corporation or 542
during the first 30 days of coverage by the corporation, and the 543
producing agent who submitted the application to the plan or the 544
corporation is not currently appointed by the insurer, the 545
insurer shall: 546
(A) Pay to the producing agent of record of the policy, 547
for the first year, an amount that is the greater of the 548
insurer's usual and customary commission for the type of policy 549
written or a fee equal to the usual and customary commission of 550
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the corporation; or 551
(B) Offer to allow the producing agent of record of the 552
policy to continue servicing the policy for at least 1 year and 553
offer to pay the agent the greater of the insurer's or the 554
corporation's usual and customary commission for the type of 555
policy written. 556
557
If the producing agent is unwilling or unable to accept 558
appointment, the new insurer shall pay the agent in accordance 559
with sub-sub-sub-subparagraph (A). 560
(III)(II) If the corporation enters into a contractual 561
agreement for a take -out plan, the producing agent of record of 562
the corporation policy is entitled to retain any unearned 563
commission on the policy, and the insurer shall: 564
(A) Pay to the producing agent of record, for the first 565
year, an amount that is the greater of the insurer's usual and 566
customary commission for the type of policy written or a fee 567
equal to the usual and customary commission of the corporation; 568
or 569
(B) Offer to allow the producing agent of record to 570
continue servicing the policy for at least 1 year and offer to 571
pay the agent the greater of the insurer's or the corporation's 572
usual and customary commission for the type of policy written. 573
574
If the producing agent is unwilling or unable to accept 575
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appointment, the new insurer shall pay the agent in accordance 576
with sub-sub-sub-subparagraph (A). 577
c. For purposes of determining comparable coverage under 578
sub-subparagraphs a. and b., the comparison must be based on 579
those forms and coverages that are reasonably comparable. The 580
corporation may rely on a determination of comparable cover age 581
and premium made by the producing agent who submits the 582
application to the corporation, made in the agent's capacity as 583
the corporation's agent. A comparison may be made solely of the 584
premium with respect to the main building or structure only on 585
the following basis: the same coverage A or other building 586
limits; the same percentage hurricane deductible that applies on 587
an annual basis or that applies to each hurricane for commercial 588
residential property; the same percentage of ordinance and law 589
coverage, if the same limit is offered by both the corporation 590
and the authorized insurer; the same mitigation credits, to the 591
extent the same types of credits are offered both by the 592
corporation and the authorized insurer; the same method for loss 593
payment, such as replacement cost or actual cash value, if the 594
same method is offered both by the corporation and the 595
authorized insurer in accordance with underwriting rules; and 596
any other form or coverage that is reasonably comparable as 597
determined by the board. If an a pplication is submitted to the 598
corporation for wind -only coverage in the coastal account, the 599
premium for the corporation's wind -only policy plus the premium 600
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for the ex-wind policy that is offered by an authorized insurer 601
to the applicant must be compared to the premium for multiperil 602
coverage offered by an authorized insurer, subject to the 603
standards for comparison specified in this subparagraph. If the 604
corporation or the applicant requests from the authorized 605
insurer a breakdown of the premium of the offe r by types of 606
coverage so that a comparison may be made by the corporation or 607
its agent and the authorized insurer refuses or is unable to 608
provide such information, the corporation may treat the offer as 609
not being an offer of coverage from an authorized in surer at the 610
insurer's approved rate. 611
6. Must include rules for classifications of risks and 612
rates. 613
7. Must provide that if premium and investment income for 614
an account attributable to a particular calendar year are in 615
excess of projected losses and ex penses for the account 616
attributable to that year, such excess shall be held in surplus 617
in the account. Such surplus must be available to defray 618
deficits in that account as to future years and used for that 619
purpose before assessing assessable insurers and a ssessable 620
insureds as to any calendar year. 621
8. Must provide objective criteria and procedures to be 622
uniformly applied to all applicants in determining whether an 623
individual risk is so hazardous as to be uninsurable. In making 624
this determination and in es tablishing the criteria and 625
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
procedures, the following must be considered: 626
a. Whether the likelihood of a loss for the individual 627
risk is substantially higher than for other risks of the same 628
class; and 629
b. Whether the uncertainty associated with the ind ividual 630
risk is such that an appropriate premium cannot be determined. 631
632
The acceptance or rejection of a risk by the corporation must 633
shall be construed as the private placement of insurance, and 634
the provisions of chapter 120 does do not apply. 635
9. Must provide that the corporation make its best efforts 636
to procure catastrophe reinsurance at reasonable rates, to cover 637
its projected 100-year probable maximum loss as determined by 638
the board of governors. If catastrophe reinsurance is not 639
available at reasonab le rates, the corporation need not purchase 640
it, but the corporation shall include the costs of reinsurance 641
to cover its projected 100 -year probable maximum loss in its 642
rate calculations even if it does not purchase catastrophe 643
reinsurance. 644
10. The policies issued by the corporation Must provide 645
that if the corporation or the market assistance plan obtains an 646
offer from an authorized insurer to cover the risk at its 647
approved rates, the risk is no longer eligible for renewal 648
through the corporation, except as otherwise provided in this 649
subsection. 650
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
11. Corporation policies and applications Must include a 651
notice that the corporation policy could, under this section, be 652
replaced with a policy issued by an authorized insurer which 653
does not provide coverage ide ntical to the coverage provided by 654
the corporation. The notice must also specify that acceptance of 655
corporation coverage creates a conclusive presumption that the 656
applicant or policyholder is aware of this potential. 657
12. May establish, subject to approval by the office, 658
different eligibility requirements and operational procedures 659
for any line or type of coverage for any specified county or 660
area if the board determines that such changes are justified due 661
to the voluntary market being sufficiently s table and 662
competitive in such area or for such line or type of coverage 663
and that consumers who, in good faith, are unable to obtain 664
insurance through the voluntary market through ordinary methods 665
continue to have access to coverage from the corporation. If 666
coverage is sought in connection with a real property transfer, 667
the requirements and procedures may not provide an effective 668
date of coverage later than the date of the closing of the 669
transfer as established by the transferor, the transferee, and, 670
if applicable, the lender. 671
13. Must provide that, with respect to the coastal 672
account, any assessable insurer with a surplus as to 673
policyholders of $25 million or less writing 25 percent or more 674
of its total countrywide property insurance premiums in this 675
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state may petition the office, within the first 90 days of each 676
calendar year, to qualify as a limited apportionment company. A 677
regular assessment levied by the corporation on a limited 678
apportionment company for a deficit incurred by the corporation 679
for the coastal account may be paid to the corporation on a 680
monthly basis as the assessments are collected by the limited 681
apportionment company from its insureds, but a limited 682
apportionment company must begin collecting the regular 683
assessments not later than 90 days after the regular assessments 684
are levied by the corporation, and the regular assessments must 685
be paid in full within 15 months after being levied by the 686
corporation. A limited apportionment company shall collect from 687
its policyholders any emergency assess ment imposed under sub -688
subparagraph (b)3.d. The plan must provide that, if the office 689
determines that any regular assessment will result in an 690
impairment of the surplus of a limited apportionment company, 691
the office may direct that all or part of such asse ssment be 692
deferred as provided in subparagraph (q)4. However, an emergency 693
assessment to be collected from policyholders under sub -694
subparagraph (b)3.d. may not be limited or deferred. 695
14. Must provide that the corporation appoint as its 696
licensed agents only those agents who throughout such 697
appointments also hold an appointment as defined in s. 626.015 698
by an insurer who is authorized to write and is actually writing 699
or renewing personal lines residential property coverage, 700
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
commercial residential property c overage, or commercial 701
nonresidential property coverage within this the state. 702
15. Must provide a premium payment plan option to its 703
policyholders which, at a minimum, allows for quarterly and 704
semiannual payment of premiums. A monthly payment plan may, b ut 705
is not required to, be offered. 706
16. Must limit coverage on mobile homes or manufactured 707
homes built before 1994 to actual cash value of the dwelling 708
rather than replacement costs of the dwelling. 709
17. Must provide coverage for manufactured or mobile home 710
dwellings. Such coverage must also include the following 711
attached structures: 712
a. Screened enclosures that are aluminum framed or 713
screened enclosures that are not covered by the same or 714
substantially the same materials as those of the primary 715
dwelling; 716
b. Carports that are aluminum or carports that are not 717
covered by the same or substantially the same materials as those 718
of the primary dwelling; and 719
c. Patios that have a roof covering that is constructed of 720
materials that are not the same or substa ntially the same 721
materials as those of the primary dwelling. 722
723
The corporation shall make available a policy for mobile homes 724
or manufactured homes for a minimum insured value of at least 725
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
$3,000. 726
18. May provide such limits of coverage as the board 727
determines, consistent with the requirements of this subsection. 728
19. May require commercial property to meet specified 729
hurricane mitigation construction features as a condition of 730
eligibility for coverage. 731
20. Must provide that new or renewal policies issued by 732
the corporation on or after January 1, 2012, which cover 733
sinkhole loss do not include coverage for any loss to 734
appurtenant structures, driveways, sidewalks, decks, or patios 735
that are directly or indirectly caused by sinkhole activity. The 736
corporation shall exclude such coverage using a notice of 737
coverage change, which may be included with the policy renewal, 738
and not by issuance of a notice of nonrenewal of the excluded 739
coverage upon renewal of the current policy. 740
21. As of January 1, 2012, must requir e that the agent 741
obtain from an applicant for coverage from the corporation an 742
acknowledgment signed by the applicant, which includes, at a 743
minimum, the following statement: 744
ACKNOWLEDGMENT OF POTENTIAL SURCHARGE 745
AND ASSESSMENT LIABILITY: 746
1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE 747
CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A 748
DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON, 749
MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND 750
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
PAYABLE UPON RENEWAL, CANCELLA TION, OR TERMINATION OF THE 751
POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT 752
OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA 753
LEGISLATURE. 754
2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER 755
SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM, 756
BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO 757
BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN 758
PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE 759
WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES 760
ARE REGULATED AND APPROVED BY THE STATE. 761
3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY 762
ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER 763
INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE 764
FLORIDA LEGISLATURE. 765
4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE 766
CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE 767
STATE OF FLORIDA. 768
a. The corporation shall maintain, in electronic format or 769
otherwise, a copy of the applicant's signe d acknowledgment and 770
provide a copy of the statement to the policyholder as part of 771
the first renewal after the effective date of this subparagraph. 772
b. The signed acknowledgment form creates a conclusive 773
presumption that the policyholder understood and a ccepted his or 774
her potential surcharge and assessment liability as a 775
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policyholder of the corporation. 776
(d)1. All prospective employees for senior management 777
positions, as defined by the plan of operation, are subject to 778
background checks as a prerequisite for employment. The office 779
shall conduct the background checks pursuant to ss. 624.34, 780
624.404(3), and 628.261. 781
2. On or before July 1 of each year, employees of the 782
corporation must sign and submit a statement attesting that they 783
do not have a conflict of interest, as defined in part III of 784
chapter 112. As a condition of employment, all prospective 785
employees must sign and submit to the corporation a conflict -of-786
interest statement. 787
3. The executive director, senior managers, and members of 788
the board of governors are subject to part III of chapter 112, 789
including, but not limited to, the code of ethics and public 790
disclosure and reporting of financial interests, pursuant to s. 791
112.3145. For purposes of applying part III of chapter 112 to 792
activities of the executive director, senior managers, and 793
members of the board of governors, those persons shall be 794
considered public officers or employees and the corporation 795
shall be considered their agency. Notwithstanding s. 796
112.3143(2), a board member may not vote on any measure that 797
would inure to his or her special private gain or loss; that he 798
or she knows would inure to the special private gain or loss of 799
any principal by whom he or she is retained or to the parent 800
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organization or subsidiary of a corporate principa l by which he 801
or she is retained, other than an agency as defined in s. 802
112.312; or that he or she knows would inure to the special 803
private gain or loss of a relative or business associate of the 804
public officer. Before the vote is taken, such member shall 805
publicly state to the assembly the nature of his or her interest 806
in the matter from which he or she is abstaining from voting 807
and, within 15 days after the vote occurs, disclose the nature 808
of his or her interest as a public record in a memorandum filed 809
with the person responsible for recording the minutes of the 810
meeting, who shall incorporate the memorandum in the minutes. 811
Senior managers and board members are also required to file such 812
disclosures with the Commission on Ethics and the Office of 813
Insurance Regulation. The executive director of the corporation 814
or his or her designee shall notify each existing and newly 815
appointed member of the board of governors and senior managers 816
of their duty to comply with the reporting requirements of part 817
III of chapter 112. At least quarterly, the executive director 818
or his or her designee shall submit to the Commission on Ethics 819
a list of names of the senior managers and members of the board 820
of governors who are subject to the public disclosure 821
requirements under s. 112.3 145. 822
4. Notwithstanding s. 112.3148, s. 112.3149, or any other 823
provision of law, an employee or board member may not knowingly 824
accept, directly or indirectly, any gift or expenditure from a 825
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
person or entity, or an employee or representative of such 826
person or entity, which has a contractual relationship with the 827
corporation or who is under consideration for a contract. An 828
employee or board member who fails to comply with subparagraph 829
3. or this subparagraph is subject to penalties provided under 830
ss. 112.317 and 112.3173. 831
5. Any senior manager of the corporation who is employed 832
on or after January 1, 2007, regardless of the date of hire, who 833
subsequently retires or terminates employment is prohibited from 834
representing another person or entity before the co rporation for 835
2 years after retirement or termination of employment from the 836
corporation. 837
6. The executive director, members of the board of 838
governors, and senior managers of the corporation are prohibited 839
from having any employment or contractual relati onship for 2 840
years after retirement from or termination of service to the 841
corporation with an insurer that has entered into a take -out 842
bonus agreement with the corporation. 843
7. At the time of appointment, the executive director must 844
have the experience, character, and qualifications sufficient to 845
qualify as a chief executive officer of an insurer in accordance 846
with s. 624.404(3). 847
(n)1. Rates for coverage provided by the corporation must 848
be actuarially sound and subject to s. 627.062, except as 849
otherwise provided in this paragraph. The corporation shall file 850
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its recommended rates with the office at least annually. The 851
corporation shall provide any additional information regarding 852
the rates which the office requires. The office shall consider 853
the recommendations of the board and issue a final order 854
establishing the rates for the corporation within 45 days after 855
the recommended rates are filed. The corporation may not pursue 856
an administrative challenge or judicial review of the final 857
order of the office. 858
2. In addition to the rates otherwise determined pursuant 859
to this paragraph, the corporation shall impose and collect an 860
amount equal to the premium tax provided in s. 624.509 to 861
augment the financial resources of the corporation. 862
3. If After the public hurricane loss-projection model 863
under s. 627.06281 is has been found to be accurate and reliable 864
by the Florida Commission on Hurricane Loss Projection 865
Methodology, it must the model shall be considered when 866
establishing the windstorm portion of the corpora tion's rates. 867
The corporation may use the public model results in combination 868
with the results of private models to calculate rates for the 869
windstorm portion of the corporation's rates. This subparagraph 870
does not require or allow the corporation to adopt r ates lower 871
than the rates otherwise required or allowed by this paragraph. 872
4. The corporation must make a recommended actuarially 873
sound rate filing for each personal and commercial line of 874
business it writes. 875
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5. Notwithstanding the board's recommended rates and the 876
office's final order regarding the corporation's filed rates 877
under subparagraph 1., the corporation shall annually implement 878
a rate increase that which, except for sinkhole coverage, does 879
not exceed the following for any single policy issued by the 880
corporation, excluding coverage changes and surcharges: 881
a. Eleven percent for 2022. 882
b. Twelve percent for 2023. 883
c. Thirteen percent for 2024. 884
d. Fourteen percent for 2025. 885
e. Fifteen percent for 2026 and all subsequent years. 886
6. The corporation may also implement an increase to 887
reflect the effect on the corporation of the cash buildup factor 888
pursuant to s. 215.555(5)(b). 889
7. The corporation's implementation of rates as prescribed 890
in subparagraph 5. must shall cease for any line of busine ss 891
written by the corporation upon the corporation's implementation 892
of actuarially sound rates. Thereafter, the corporation shall 893
annually make a recommended actuarially sound rate filing for 894
each commercial and personal line of business the corporation 895
writes. 896
(x)1. The following records of the corporation are 897
confidential and exempt from the provisions of s. 119.07(1) and 898
s. 24(a), Art. I of the State Constitution: 899
a. Underwriting files, except that a policyholder or an 900
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applicant shall have access to his or her own underwriting 901
files. Confidential and exempt underwriting file records may 902
also be released to other governmental agencies upon written 903
request and demonstration of need; such records held by the 904
receiving agency remain confidential and exemp t as provided 905
herein. 906
b. Claims files, until termination of all litigation and 907
settlement of all claims arising out of the same incident, 908
although portions of the claims files may remain exempt, as 909
otherwise provided by law. Confidential and exempt claim s file 910
records may be released to other governmental agencies upon 911
written request and demonstration of need; such records held by 912
the receiving agency remain confidential and exempt as provided 913
herein. 914
c. Records obtained or generated by an internal aud itor 915
pursuant to a routine audit, until the audit is completed, or if 916
the audit is conducted as part of an investigation, until the 917
investigation is closed or ceases to be active. An investigation 918
is considered "active" while the investigation is being 919
conducted with a reasonable, good faith belief that it could 920
lead to the filing of administrative, civil, or criminal 921
proceedings. 922
d. Matters reasonably encompassed in privileged attorney -923
client communications. 924
e. Proprietary information licensed to the c orporation 925
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under contract and the contract provides for the confidentiality 926
of such proprietary information. 927
f. All information relating to the medical condition or 928
medical status of a corporation employee which is not relevant 929
to the employee's capacity to perform his or her duties, except 930
as otherwise provided in this paragraph. Information that is 931
exempt includes shall include, but is not limited to, 932
information relating to workers' compensation, insurance 933
benefits, and retirement or disability benefit s. 934
g. Upon an employee's entrance into the employee 935
assistance program, a program to assist any employee who has a 936
behavioral or medical disorder, substance abuse problem, or 937
emotional difficulty that affects the employee's job 938
performance, all records r elative to that participation are 939
shall be confidential and exempt from the provisions of s. 940
119.07(1) and s. 24(a), Art. I of the State Constitution, except 941
as otherwise provided in s. 112.0455(11). 942
h. Information relating to negotiations for financing, 943
reinsurance, depopulation, or contractual services, until the 944
conclusion of the negotiations. 945
i. Minutes of closed meetings regarding underwriting 946
files, and minutes of closed meetings regarding an open claims 947
file until termination of all litigation an d settlement of all 948
claims with regard to that claim, except that information 949
otherwise confidential or exempt by law must shall be redacted. 950
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2. If an authorized insurer is considering underwriting a 951
risk insured by the corporation, relevant underwriting files and 952
confidential claims files may be released to the insurer 953
provided that the insurer agrees in writing, notarized and under 954
oath, to maintain the confidentiality of such files. If a policy 955
file is transferred to an insurer, that policy file is no longer 956
a public record because it is not held by an agency subject to 957
the provisions of the public records law. Underwriting files and 958
confidential claims files may also be released to staff and the 959
board of governors of the market assistance plan established 960
pursuant to s. 627.3515, who must retain the confidentiality of 961
such files, except such files may be released to authorized 962
insurers that are considering assuming the risks to which the 963
files apply, provided the insurer agrees in writing, notarized 964
and under oath, to maintain the confidentiality of such files. 965
Finally, the corporation or the board or staff of the market 966
assistance plan may ma ke the following information obtained from 967
underwriting files and confidential claims files available to an 968
entity that has obtained a permit to become an authorized 969
insurer, a reinsurer that may provide reinsurance under s. 970
624.610, a licensed reinsurance broker, a licensed rating 971
organization, a modeling company, or a licensed general lines 972
insurance agent: name, address, and telephone number of the 973
residential property owner or insured; location of the risk; 974
rating information; loss history; and policy t ype. The receiving 975
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person must retain the confidentiality of the information 976
received and may use the information only for the purposes of 977
developing a take-out plan or a rating plan to be submitted to 978
the office for approval or otherwise analyzing the und erwriting 979
of a risk or risks insured by the corporation on behalf of the 980
private insurance market. A licensed general lines insurance 981
agent may not use such information for the direct solicitation 982
of policyholders. 983
3. A policyholder who has filed suit ag ainst the 984
corporation has the right to discover the contents of his or her 985
own claims file to the same extent that discovery of such 986
contents would be available from a private insurer in litigation 987
as provided by the Florida Rules of Civil Procedure, the F lorida 988
Evidence Code, and other applicable law. Pursuant to subpoena, a 989
third party has the right to discover the contents of an 990
insured's or applicant's underwriting or claims file to the same 991
extent that discovery of such contents would be available from a 992
private insurer by subpoena as provided by the Florida Rules of 993
Civil Procedure, the Florida Evidence Code, and other applicable 994
law, and subject to any confidentiality protections requested by 995
the corporation and agreed to by the seeking party or order ed by 996
the court. The corporation may release confidential underwriting 997
and claims file contents and information as it deems necessary 998
and appropriate to underwrite or service insurance policies and 999
claims, subject to any confidentiality protections deemed 1000
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necessary and appropriate by the corporation. 1001
4. Portions of meetings of the corporation are exempt from 1002
the provisions of s. 286.011 and s. 24(b), Art. I of the State 1003
Constitution wherein confidential underwriting files or 1004
confidential open claims files are discussed. All portions of 1005
corporation meetings which are closed to the public shall be 1006
recorded by a court reporter. The court reporter shall record 1007
the times of commencement and termination of the meeting, all 1008
discussion and proceedings, the names o f all persons present at 1009
any time, and the names of all persons speaking. No portion of 1010
any closed meeting shall be off the record. Subject to the 1011
provisions hereof and s. 119.07(1)(d) -(f), the court reporter's 1012
notes of any closed meeting shall be retained by the corporation 1013
for a minimum of 5 years. A copy of the transcript, less any 1014
exempt matters, of any closed meeting wherein claims are 1015
discussed shall become public as to individual claims after 1016
settlement of the claim. 1017
(ii) The corporation shall revi se the programs adopted 1018
pursuant to sub-subparagraph (q)3.a. for personal lines 1019
residential policies to maximize policyholder options and 1020
encourage increased participation by insurers and agents. After 1021
January 1, 2017, a policy may not be taken out of the 1022
corporation unless the provisions of this paragraph are met. 1023
1. The corporation must publish a periodic schedule of 1024
cycles during which an insurer may identify, and notify the 1025
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corporation of, policies that the insurer is requesting to take 1026
out. A request must include a description of the coverage 1027
offered and an estimated premium and must be submitted to the 1028
corporation in a form and manner prescribed by the corporation. 1029
2. The corporation must maintain and make available to the 1030
agent of record a consoli dated list of all insurers requesting 1031
to take out a policy. The list must include a description of the 1032
coverage offered and the estimated premium for each take -out 1033
request. 1034
3. If a policyholder receives a take -out offer from an 1035
authorized insurer, the risk is no longer eligible for coverage 1036
with the corporation unless the premium for coverage from the 1037
authorized insurer is more than the following percent greater 1038
than the renewal premium for comparable coverage from the 1039
corporation: 1040
a. Four percent for policies effective on or after January 1041
1, 2023. 1042
b. Eight percent for policies effective on or after 1043
January 1, 2024. 1044
c. Twelve percent for policies effective on or after 1045
January 1, 2025. 1046
d. Sixteen percent for policies effective on or after 1047
January 1, 2026. 1048
e. Twenty percent for policies effective on or after 1049
January 1, 2027, and in all subsequent years. 1050
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4.3. The corporation must provide written notice to the 1051
policyholder and the agent of record regarding all insurers 1052
requesting to take out the p olicy, which and regarding the 1053
policyholder's option to accept a take -out offer or to reject 1054
all take-out offers and to remain with the corporation. The 1055
notice must be in a format prescribed by the corporation and 1056
include, for each take -out offer: 1057
a. The amount of the estimated premium; 1058
b. A description of the coverage; and 1059
c. A comparison of the estimated premium and coverage 1060
offered by the insurer to the estimated premium and coverage 1061
provided by the corporation. 1062
Section 3. Section 627.3517, Flo rida Statutes, is amended 1063
to read: 1064
627.3517 Consumer choice. —No provision of s. 627.351, s. 1065
627.3511, or s. 627.3515 shall be construed to impair the right 1066
of any insurance risk apportionment plan policyholder, upon 1067
receipt of any keep-out keepout or take-out offer, to retain his 1068
or her current agent, so long as that agent is duly licensed and 1069
appointed by the insurance risk apportionment plan or otherwise 1070
authorized to place business with the insurance risk 1071
apportionment plan. This right may shall not be canceled, 1072
suspended, impeded, abridged, or otherwise compromised by any 1073
rule, plan of operation, or depopulation plan, whether through 1074
keep-out keepout, take-out, midterm assumption, or any other 1075
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means, of any insurance risk apportionment plan or depopula tion 1076
plan, including, but not limited to, those described in s. 1077
627.351, s. 627.3511, or s. 627.3515. The commission shall adopt 1078
any rules necessary to cause any insurance risk apportionment 1079
plan or market assistance plan under such sections to 1080
demonstrate that the operations of the plan do not interfere 1081
with, promote, or allow interference with the rights created 1082
under this section. If the policyholder's current agent is 1083
unable or unwilling to be appointed with the insurer making the 1084
take-out or keep-out keepout offer, the policyholder is shall 1085
not be disqualified from participation in the appropriate 1086
insurance risk apportionment plan because of an offer of 1087
coverage in the voluntary market. An offer of full property 1088
insurance coverage by the insurer current ly insuring either the 1089
ex-wind or wind-only coverage on the policy to which the offer 1090
applies is shall not be considered a take-out or keep-out 1091
keepout offer. Any rule, plan of operation, or plan of 1092
depopulation, through keep-out keepout, take-out, midterm 1093
assumption, or any other means, of any property insurance risk 1094
apportionment plan under s. 627.351(2) or (6) is subject to ss. 1095
627.351(2)(b) and (6)(c) and 627.3511(4). 1096
Section 4. Section 627.3518, Florida Statutes, is amended 1097
to read: 1098
627.3518 Citizens Property Insurance Corporation 1099
policyholder eligibility clearinghouse program. —The purpose of 1100
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this section is to provide a framework for the corporation to 1101
implement a clearinghouse program by January 1, 2014. 1102
(1) As used in this section, the term: 1103
(a) "Corporation" means Citizens Property Insurance 1104
Corporation. 1105
(b) "Exclusive agent" means any licensed insurance agent 1106
that has, by contract, agreed to act exclusively for one company 1107
or group of affiliated insurance companies and is disallowed by 1108
the provisions of that contract to directly write for any other 1109
unaffiliated insurer absent express consent from the company or 1110
group of affiliated insurance companies. 1111
(c) "Independent agent" means any licensed insurance agent 1112
not described in paragraph (b). 1113
(d) "Program" means the clearinghouse created under this 1114
section. 1115
(2) In order to confirm eligibility with the corporation 1116
and to enhance access of new applicants for coverage and 1117
existing policyholders of the corporation to offers of coverage 1118
from authorized insurers, the corporation shall establish a 1119
program for personal residential risks in order to facilitate 1120
the diversion of ineligible applicants and existing 1121
policyholders from the corporation into the voluntary insurance 1122
market. The corporati on shall also develop appropriate 1123
procedures for facilitating the diversion of ineligible 1124
applicants and existing policyholders for commercial residential 1125
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coverage into the private insurance market and shall report such 1126
procedures to the President of the S enate and the Speaker of the 1127
House of Representatives by January 1, 2014 . 1128
(3) The corporation board shall establish the 1129
clearinghouse program as an organizational unit within the 1130
corporation. The program shall have all the rights and 1131
responsibilities in carrying out its duties as a licensed 1132
general lines agent, but may not be required to employ or engage 1133
a licensed general lines agent or to maintain an insurance 1134
agency license to carry out its activities in the solicitation 1135
and placement of insurance cove rage. In establishing the 1136
program, the corporation may: 1137
(a) Require all new applications, and all policies due for 1138
renewal, to be submitted for coverage to the program in order to 1139
facilitate obtaining an offer of coverage from an authorized 1140
insurer before binding or renewing coverage by the corporation. 1141
(b) Employ or otherwise contract with individuals or other 1142
entities for appropriate administrative or professional services 1143
to effectuate the plan within the corporation in accordance with 1144
the applicable purchasing requirements under s. 627.351. 1145
(c) Enter into contracts with any authorized insurer to 1146
participate in the program and accept an appointment by such 1147
insurer. 1148
(d) Provide funds to operate the program. Insurers and 1149
agents participating in the program are not required to pay a 1150
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fee to offset or partially offset the cost of the program or use 1151
the program for renewal of policies initially written through 1152
the clearinghouse. 1153
(e) Develop an enhanced application that includes 1154
information to assist pr ivate insurers in determining whether to 1155
make an offer of coverage through the program. 1156
(f) For personal lines residential risks, require, before 1157
approving all new applications for coverage by the corporation, 1158
that every application be subject to a perio d of 2 business days 1159
when any insurer participating in the program may select the 1160
application for coverage. The insurer may issue a binder on any 1161
policy selected for coverage for a period of at least 30 days 1162
but not more than 60 days. 1163
(4) Any authorized insurer may participate in the program; 1164
however, participation is not mandatory for any insurer. 1165
Insurers making offers of coverage to new applicants or renewal 1166
policyholders through the program: 1167
(a) May not be required to individually appoint any agent 1168
whose customer is underwritten and bound through the program. 1169
Notwithstanding s. 626.112, insurers are not required to appoint 1170
any agent on a policy underwritten through the program for as 1171
long as that policy remains with the insurer. Insurers may, at 1172
their election, appoint any agent whose customer is initially 1173
underwritten and bound through the program. In the event an 1174
insurer accepts a policy from an agent who is not appointed 1175
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pursuant to this paragraph, and thereafter elects to accept a 1176
policy from such agent, the provisions of s. 626.112 requiring 1177
appointment apply to the agent. 1178
(b) Must enter into a limited agency agreement with each 1179
agent that is not appointed in accordance with paragraph (a) and 1180
whose customer is underwritten and bound through the program. 1181
(c) Must enter into its standard agency agreement with 1182
each agent whose customer is underwritten and bound through the 1183
program when that agent has been appointed by the insurer 1184
pursuant to s. 626.112. 1185
(d) Must comply with s. 627.4133(2). 1186
(e) May participate through their single -designated 1187
managing general agent or broker; however, the provisions of 1188
paragraph (6)(a) regarding ownership, control, and use of the 1189
expirations continue to apply. 1190
(f) Must pay to the producing agent a commission eq ual to 1191
that paid by the corporation or the usual and customary 1192
commission paid by the insurer for that line of business, 1193
whichever is greater. 1194
(5) Notwithstanding s. 627.3517, any applicant for new 1195
coverage from the corporation is not eligible for covera ge from 1196
the corporation if provided an offer of coverage from an 1197
authorized insurer through the program at a premium that is at 1198
or below the eligibility threshold established in s. 1199
627.351(6)(c)5.a. Whenever an offer of coverage for a personal 1200
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lines risk is received for a policyholder of the corporation at 1201
renewal from an authorized insurer through the program, if the 1202
offer is equal to or less than the corporation's renewal premium 1203
for comparable coverage, the risk is not eligible for coverage 1204
with the corporation if the offer is at or below the eligibility 1205
threshold specified in s. 627.351(6)(c)5.a . In the event that an 1206
offer of coverage for a new applicant is received from an 1207
authorized insurer through the program, and the premium offered 1208
exceeds the eligibility threshold specified contained in s. 1209
627.351(6)(c)5.a., the applicant or insured may elect to accept 1210
such coverage, or may elect to accept or continue coverage with 1211
the corporation. In the event that an offer of coverage for a 1212
personal lines risk is received from an authorized insurer at 1213
renewal through the program, and the premium offered is at or 1214
below the eligibility threshold specified in s. 1215
627.351(6)(c)5.a. more than the corporation's renewal premium 1216
for comparable coverage , the insured is not eligible to may 1217
elect to accept such coverage, or may elect to accept or 1218
continue coverage with the corporation. Section 1219
627.351(6)(c)5.a.(I) does not apply to an offer of coverage from 1220
an authorized insurer obtained through the program. An applicant 1221
for coverage from the corporation who was declared ineligible 1222
for coverage at renewal by the corporation in the previous 36 1223
months due to an offer of coverage pursuant to this subsection 1224
shall be considered a renewal under this section if the 1225
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corporation determines that the authorized insurer making the 1226
offer of coverage pursuant to this subsection continues to 1227
insure the applicant and increased the rate on the policy in 1228
excess of the increase allowed for the corporation under s. 1229
627.351(6)(n)5. 1230
(6) Independent insurance agents submitting new 1231
applications for coverage or that are the agent of record on a 1232
renewal policy submitted to the program: 1233
(a) Are granted and must maintain ownership and the 1234
exclusive use of expirations, records, or other written or 1235
electronic information directly related to such applications or 1236
renewals written through the corporation or through an insurer 1237
participating in the program, notwithstanding s. 1238
627.351(6)(c)5.a.(I)(B) and (II)(B). Such ownership is granted 1239
for as long as the ins ured remains with the agency or until sold 1240
or surrendered in writing by the agent. Contracts with the 1241
corporation or required by the corporation must not amend, 1242
modify, interfere with, or limit such rights of ownership. Such 1243
expirations, records, or other written or electronic information 1244
may be used to review an application, issue a policy, or for any 1245
other purpose necessary for placing such business through the 1246
program. 1247
(b) May not be required to be appointed by any insurer 1248
participating in the program for policies written solely through 1249
the program, notwithstanding the provisions of s. 626.112. 1250
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(c) May accept an appointment from any insurer 1251
participating in the program. 1252
(d) May enter into either a standard or limited agency 1253
agreement with the insure r, at the insurer's option. 1254
1255
Applicants ineligible for coverage in accordance with subsection 1256
(5) remain ineligible if their independent agent is unwilling or 1257
unable to enter into a standard or limited agency agreement with 1258
an insurer participating in the program. 1259
(7) Exclusive agents submitting new applications for 1260
coverage or that are the agent of record on a renewal policy 1261
submitted to the program: 1262
(a) Must maintain ownership and the exclusive use of 1263
expirations, records, or other written or electron ic information 1264
directly related to such applications or renewals written 1265
through the corporation or through an insurer participating in 1266
the program, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and 1267
(II)(B). Contracts with the corporation or required by the 1268
corporation must not amend, modify, interfere with, or limit 1269
such rights of ownership. Such expirations, records, or other 1270
written or electronic information may be used to review an 1271
application, issue a policy, or for any other purpose necessary 1272
for placing such business through the program. 1273
(b) May not be required to be appointed by any insurer 1274
participating in the program for policies written solely through 1275
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the program, notwithstanding the provisions of s. 626.112. 1276
(c) Must only facilitate the placemen t of an offer of 1277
coverage from an insurer whose limited servicing agreement is 1278
approved by that exclusive agent's exclusive insurer. 1279
(d) May enter into a limited servicing agreement with the 1280
insurer making an offer of coverage, and only after the 1281
exclusive agent's insurer has approved the limited servicing 1282
agreement terms. The exclusive agent's insurer must approve a 1283
limited service agreement for the program for any insurer for 1284
which it has approved a service agreement for other purposes. 1285
1286
Applicants ineligible for coverage in accordance with subsection 1287
(5) remain ineligible if their exclusive agent is unwilling or 1288
unable to enter into a standard or limited agency agreement with 1289
an insurer making an offer of coverage to that applicant. 1290
(8) Submission of an application for coverage by the 1291
corporation to the program does not constitute the binding of 1292
coverage by the corporation, and failure of the program to 1293
obtain an offer of coverage by an insurer may not be considered 1294
acceptance of coverage of the risk b y the corporation. 1295
(9) The 45-day notice of nonrenewal requirement set forth 1296
in s. 627.4133(2)(b)5. applies when a policy is nonrenewed by 1297
the corporation because the risk has received an offer of 1298
coverage pursuant to this section which renders the risk 1299
ineligible for coverage by the corporation. 1300
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(10) The program may not include commercial nonresidential 1301
policies. 1302
(11) Proprietary business information provided to the 1303
corporation's clearinghouse by insurers with respect to 1304
identifying and selecting ris ks for an offer of coverage is 1305
confidential and exempt from s. 119.07(1) and s. 24(a), Art. I 1306
of the State Constitution. 1307
(a) As used in this subsection, the term "proprietary 1308
business information" means information, regardless of form or 1309
characteristics, which is owned or controlled by an insurer and: 1310
1. Is identified by the insurer as proprietary business 1311
information and is intended to be and is treated by the insurer 1312
as private in that the disclosure of the information would cause 1313
harm to the insurer, an individual, or the company's business 1314
operations and has not been disclosed unless disclosed pursuant 1315
to a statutory requirement, an order of a court or 1316
administrative body, or a private agreement that provides that 1317
the information will not be released to the public; 1318
2. Is not otherwise readily ascertainable or publicly 1319
available by proper means by other persons from another source 1320
in the same configuration as provided to the clearinghouse; and 1321
3. Includes: 1322
a. Trade secrets, as defined in s. 688.0 02. 1323
b. Information relating to competitive interests, the 1324
disclosure of which would impair the competitive business of the 1325
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provider of the information. 1326
1327
Proprietary business information may be found in underwriting 1328
criteria or instructions which are used to identify and select 1329
risks through the program for an offer of coverage and are 1330
shared with the clearinghouse to facilitate the shopping of 1331
risks with the insurer. 1332
(b) The clearinghouse may disclose confidential and exempt 1333
proprietary business informa tion: 1334
1. If the insurer to which it pertains gives prior written 1335
consent; 1336
2. Pursuant to a court order; or 1337
3. To another state agency in this or another state or to 1338
a federal agency if the recipient agrees in writing to maintain 1339
the confidential and exempt status of the document, material, or 1340
other information and has verified in writing its legal 1341
authority to maintain such confidentiality. 1342
Section 5. This act shall take effect July 1, 2022. 1343