SB 1716 — Citizens Property Insurance Corporation

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 Section 1.

Effective upon becoming a law, paragraph (aa) of subsection (6) of section 627.351, Florida Statutes, is amended to read:

627.351 Insurance risk apportionment plans.— (6) CITIZENS PROPERTY INSURANCE CORPORATION.— (aa) Except as otherwise provided in this paragraph, the corporation shall require the securing and maintaining of flood insurance as a condition of coverage of a personal lines residential risk.

The insured or applicant must execute a form approved by the office affirming that flood insurance is not provided by the corporation and that if flood insurance is not secured by the applicant or insured from an insurer other than the corporation and in addition to coverage by the corporation, the risk will not be eligible for coverage by the corporation.

The corporation may deny coverage of a personal lines residential risk to an applicant or insured who refuses to secure and maintain flood insurance.

The requirement to purchase flood insurance shall be implemented as follows:

1.

Except as provided in subparagraphs 2.

and 3., all personal lines residential policyholders must have flood coverage in place for policies effective on or after:

a.

January 1, 2024, for a structure that has a dwelling replacement cost of $600,000 or more.

b.

January 1, 2025, for a structure that has a dwelling replacement cost of $500,000 or more.

c.

January 1, 2026, for a structure that has a dwelling replacement cost of $400,000 or more.

d.

January 1, 2027, for all other personal lines residential property insured by the corporation.

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 2.

All personal lines residential policyholders whose property insured by the corporation is located within the special flood hazard area defined by the Federal Emergency Management Agency must have flood coverage in place:

a.

At the time of initial policy issuance for all new personal lines residential policies issued by the corporation on or after April 1, 2023.

b.

By the time of the policy renewal for all personal lines residential policies renewing on or after July 1, 2023.

3.

Policyholders are not required to purchase flood insurance as a condition for maintaining the following policies issued by the corporation:

a.

Policies that do not provide coverage for the peril of wind.

b.

Policies that provide coverage under a condominium unit owners form.

The flood insurance required under this paragraph must meet, at a minimum, the dwelling coverage available from the National Flood Insurance Program or the requirements of subparagraphs s.

627.715(1)(a)1., 2., and 3.

Section 2.

627.351 Insurance risk apportionment plans.— Page(2) 5WINDSTORM INSURANCE RISK APPORTIONMENT.— (b) The department shall require all insurers holding a certificate of 105authority CODING:to transact property insurance on a direct basis in this state, other than joint underwriting associations and other entities formed pursuant to this section, to provide windstorm coverage to applicants from areas determined to be eligible pursuant to paragraph (c) who in good faith are entitled to, but are unable to procure, such coverage through ordinary means;

or it shall adopt a reasonable plan or Page 3 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 (2)plans WINDSTORMfor INSURANCEthe RISKequitable APPORTIONMENT.—apportionment (b)or Thesharing departmentamong shallsuch require all insurers holding a certificate of authoritywindstorm tocoverage, transactwhich propertymay insuranceinclude onformation aof directan basisassociation infor this state,purpose. other than joint underwriting associations and other entities formed pursuant to this section, to provide windstorm coverage to applicants from areas determined to be eligible pursuant to paragraph (c) who in good faith are entitled to, but are unable to procure, such coverage through ordinary means;

or it shall adopt a reasonable plan or plans for the equitable apportionment or sharing among such insurers of windstorm coverage, which may include formation of an association for this purpose.

An applicant or policyholder is Pageeligible 6for coverage only if an offer of 105coverage CODING:cannot be obtained by or for the applicant or policyholder from an admitted insurer at approved rates.

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 eligible for coverage only if an offer of coverage cannot be obtained by or for the applicant or policyholder from an admitted insurer at approved rates.

Such participation by member insurers shall be in the proportion that the net direct premiums of each member insurer writtenPage for4 property insurance in this state during the preceding calendar year bear to the aggregate net direct premiums for property insurance of all102 memberCODING: insurers, as reduced by any credits for voluntary writings, in this state during the preceding calendar year.

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 written for property insurance in this state during the preceding calendar year bear to the aggregate net direct premiums for property insurance of all member insurers, as reduced by any credits for voluntary writings, in this state during the preceding calendar year.

The commissioner, after review of annual statements, other reports, and any other statistics that the commissioner deems necessary, shall certify to the Pageassociation 7the ofaggregate 105direct CODING:premiums written for property insurance in this state by all member insurers.

(II) Effective July 1, 2002, the association shall operate subject to the supervision and approval of a board of governors who are the same individuals that have been appointed by the Treasurer to serve on the board of governors of the Citizens Property Insurance Corporation.

(III) The plan of operation shall provide a formula whereby a company voluntarily providing windstorm coverage in affected Page 5 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 associationareas thewill aggregatebe directrelieved premiumswholly writtenor forpartially propertyfrom insuranceapportionment inof thisa stateregular byassessment allpursuant memberto insurers.sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II).

(II) Effective July 1, 2002, the association shall operate subject to the supervision and approval of a board of governors who are the same individuals that have been appointed by the Treasurer to serve on the board of governors of the Citizens Property Insurance Corporation.

(III) The plan of operation shall provide a formula whereby a company voluntarily providing windstorm coverage in affected areas will be relieved wholly or partially from apportionment of a regular assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II).

In order to qualify for the exemption under this sub-sub-subparagraph, the take-out plan must provide that at least 40 percent of the policies removed from the Residential Property and Casualty Joint Underwriting Association cover risks located in Miami-Dade, Broward, and Palm Beach Counties or at Pageleast 830 percent of 105the CODING:policies so removed cover risks located in Miami-Dade, Broward, and Palm Beach Counties and an additional 50 percent of the policies so removed cover risks located in other coastal counties, and must also provide that no more than 15 percent of the policies so removed may exclude windstorm coverage.

With the approval of the department, the association may waive these geographic criteria for a take-out plan that removes at least the lesser of 100,000 Residential Property and Casualty Joint Underwriting Association policies or Page 6 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 least15 30 percent of the policiestotal sonumber removedof coverResidential risksProperty located in Miami-Dade, Broward, and PalmCasualty BeachJoint CountiesUnderwriting andAssociation anpolicies, additionalprovided 50the percentgoverning board of the policiesResidential soProperty removedand coverCasualty risksJoint locatedUnderwriting inAssociation othercertifies coastalthat counties,the andtake-out mustplan alsowill providematerially thatreduce nothe moreResidential thanProperty 15and percentCasualty ofJoint theUnderwriting policiesAssociation’s so100-year removedprobable maymaximum excludeloss windstormfrom coverage.hurricanes.

With the approval of the department, the association may waive these geographic criteria for a take-out plan that removes at least the lesser of 100,000 Residential Property and Casualty Joint Underwriting Association policies or 15 percent of the total number of Residential Property and Casualty Joint Underwriting Association policies, provided the governing board of the Residential Property and Casualty Joint Underwriting Association certifies that the take-out plan will materially reduce the Residential Property and Casualty Joint Underwriting Association’s 100-year probable maximum loss from hurricanes.

The Legislature finds that the potential for unlimited deficit assessments under this subparagraph may induce insurers to attempt to reduce their writings in the voluntary market, and Pagethat 9such ofactions 105would CODING:worsen the availability problems that the association was created to remedy.

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 that such actions would worsen the availability problems that the association was created to remedy.

d.(I) When the deficit incurred in a particular calendar year is 10 percent or less of the aggregate statewide direct writtenPage premium7 forof property102 insuranceCODING: for the prior calendar year for all member insurers, the association shall levy an assessment on member insurers in an amount equal to the deficit.

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 written premium for property insurance for the prior calendar year for all member insurers, the association shall levy an assessment on member insurers in an amount equal to the deficit.

(III) Upon a determination by the board of directors that a deficit exceeds the amount that will be recovered through regular assessments on member insurers, pursuant to sub-sub- subparagraph (I) or sub-sub-subparagraph (II), the board shall levy, after verification by the department, emergency assessments to be collected by member insurers and by underwriting associations created pursuant to this section which Pagewrite 10property insurance, upon issuance or renewal of 105property CODING:insurance policies other than National Flood Insurance policies in the year or years following levy of the regular assessments.

The amount of the emergency assessment collected in a particular year shall be a uniform percentage of that year’s direct written premium for property insurance for all member insurers and underwriting associations, excluding National Flood Insurance policy premiums, as annually determined by the board and verified by the department.

The department shall verify the Page 8 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 writearithmetic propertycalculations insurance,involved uponin issuancethe orboard’s renewaldetermination ofwithin property30 insurancedays policiesafter otherreceipt thanof National Flood Insurance policies in the yearinformation oron yearswhich following levy of the regulardetermination assessments.was based.

The amount of the emergency assessment collected in a particular year shall be a uniform percentage of that year’s direct written premium for property insurance for all member insurers and underwriting associations, excluding National Flood Insurance policy premiums, as annually determined by the board and verified by the department.

The department shall verify the arithmetic calculations involved in the board’s determination within 30 days after receipt of the information on which the determination was based.

The board may pledge the proceeds of the emergency assessments under this sub- Pagesub-subparagraph 11as the source of 105revenue CODING:for bonds, to retire any other debt incurred as a result of the deficit or events giving rise to the deficit, or in any other way that the board determines will efficiently recover the deficit.

The emergency assessments under this sub-sub-subparagraph shall continue as long as any bonds issued or other indebtedness incurred with respect to a deficit for which the assessment was imposed remain outstanding, unless adequate provision has been made for the payment of such bonds or other indebtedness pursuant to the Page 9 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 sub-subparagraphdocument asgoverning thesuch sourcebonds of revenue for bonds, to retire any other debt incurred as a result of the deficit or events giving rise to the deficit, or in any other wayindebtedness. that the board determines will efficiently recover the deficit.

The emergency assessments under this sub-sub-subparagraph shall continue as long as any bonds issued or other indebtedness incurred with respect to a deficit for which the assessment was imposed remain outstanding, unless adequate provision has been made for the payment of such bonds or other indebtedness pursuant to the document governing such bonds or other indebtedness.

(V) If regular deficit assessments are made under sub-sub- subparagraph (I) or sub-sub-subparagraph (II), or by the Residential Property and Casualty Joint Underwriting Association under sub-subparagraph (6)(b)3.a., the association shall levy upon the association’s policyholders, as part of its next rate filing, or by a separate rate filing solely for this purpose, a Pagemarket 12equalization surcharge in a percentage equal to the total amount of 105such CODING:regular assessments divided by the aggregate statewide direct written premium for property insurance for member insurers for the prior calendar year.

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 market equalization surcharge in a percentage equal to the total amount of such regular assessments divided by the aggregate statewide direct written premium for property insurance for member insurers for the prior calendar year.

The governing body of any unit of local government, any residentsPage 10 of which102 areCODING: insured under the plan, may issue bonds as defined in s.

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 residents of which are insured under the plan, may issue bonds as defined in s.

252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and the protection and preservation of the economic stability of insurers operating in this state, and declaring it an essential public purpose to permit certain municipalities or counties to issue bonds as will provide relief to claimants and Pagepolicyholders 13of the association and insurers responsible for apportionment of 105plan CODING:losses.

Any such unit of local government may enter into such contracts with the association and with any other entity created pursuant to this subsection as are necessary to carry out this paragraph.

Any bonds issued under this sub-subparagraph shall be payable from and secured by moneys received by the association from assessments under this subparagraph, and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such Page 11 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 policyholdersbonds. of the association and insurers responsible for apportionment of plan losses.

Any such unit of local government may enter into such contracts with the association and with any other entity created pursuant to this subsection as are necessary to carry out this paragraph.

Any bonds issued under this sub-subparagraph shall be payable from and secured by moneys received by the association from assessments under this subparagraph, and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds.

The apportionment of such a member Pagecompany 14in ofany 105calendar CODING:year for which it is qualified shall not exceed its gross participation, which shall not be affected by the formula for voluntary writings.

In no event shall a limited apportionment company be required to participate in any apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds $50 million after payment of available plan funds in any calendar year.

However, a limited apportionment company shall collect from its policyholders any emergency assessment imposed Page 12 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 companyunder insub-sub-subparagraph any2.d.(III). calendar year for which it is qualified shall not exceed its gross participation, which shall not be affected by the formula for voluntary writings.

In no event shall a limited apportionment company be required to participate in any apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds $50 million after payment of available plan funds in any calendar year.

However, a limited apportionment company shall collect from its policyholders any emergency assessment imposed under sub-sub-subparagraph 2.d.(III).

Page5.a. 15 of 105 CODING:

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 5.a.

It is the intent of the Legislature that the rates for coverage provided by the association be actuarially sound and not competitive with approved rates charged in the admitted voluntary market such that the association functions as a residual market mechanism to provide insurance only when the insurancePage cannot13 beof procured102 inCODING: the voluntary market.

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 insurance cannot be procured in the voluntary market.

The association may write coverage above the limits specified in Pagethis 16subparagraph ofwith 105or CODING:without facultative or other reinsurance coverage, as the association determines appropriate.

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 this subparagraph with or without facultative or other reinsurance coverage, as the association determines appropriate.

(I) Whether the likelihood of a loss for the individual riskPage is14 substantially higher than for other risks of the102 sameCODING: class;

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 risk is substantially higher than for other risks of the same class;

(I) Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the Pageassociation; 17 of 105 CODING:

or (II) Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the association’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance Page 15 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 association;with sub-sub-subparagraph (I).

or (II) Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the association’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I).

(I) Pay to the producing agent of record of the association Pagepolicy, 18for the first year, an amount that is the greater of 105the CODING:insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the association;

or (II) Offer to allow the producing agent of record of the association policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the association’s usual and customary commission for the type of policy written.

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 policy,If for the firstproducing year,agent an amount that is theunwilling greateror ofunable theto insurer’saccept usualappointment, and customary commission for the typenew ofinsurer policyshall writtenpay or a fee equal to the usualagent andin customaryaccordance commissionwith ofsub-sub-subparagraph the(I). association;

or (II) Offer to allow the producing agent of record of the association policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer’s or the association’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I).

pledge or sell assessments, market equalization surcharges and other surcharges, rights, premiums, contractual rights, projected recoveries from the Florida Hurricane Catastrophe PageFund, 19other ofreinsurance 105recoverables, CODING:and other assets as security for such bonds, notes, or debt instruments;

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 Fund, other reinsurance recoverables, and other assets as security for such bonds, notes, or debt instruments;

The association may issue bonds or incur other indebtedness, or have bonds issued on its behalf by a unit of local government pursuant to subparagraph (6)(q)2., in the absence of a hurricane or other weather-related event, upon a determination by the association subject to approval by thePage department17 that such action would enable it to efficiently meet the financial obligations of the102 associationCODING: and that such financings are reasonably necessary to effectuate the requirements of this subsection.

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 the department that such action would enable it to efficiently meet the financial obligations of the association and that such financings are reasonably necessary to effectuate the requirements of this subsection.

I of the State Constitution, prohibiting the impairment of obligations of contracts, it is the intent of the Legislature that no action be Pagetaken 20whose ofpurpose 105is CODING:to impair any bond indenture or financing agreement or any revenue source committed by contract to such bond or other indebtedness issued or incurred by the association or any other entity created under this subsection.

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 taken whose purpose is to impair any bond indenture or financing agreement or any revenue source committed by contract to such bond or other indebtedness issued or incurred by the association or any other entity created under this subsection.

However, no commission will be paid on that portion of the premium which is in excess of the standard premium of that company.Page 18 of 102 CODING:

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 company.

The pledge or sale of, the lien upon, and the security interest in any rights, revenues, or other assets of the Pageassociation 21created or purported to be created pursuant to any financing documents to secure any bonds or other indebtedness of 105the CODING:association shall be and remain valid and enforceable, notwithstanding the commencement of and during the continuation of, and after, any rehabilitation, insolvency, liquidation, bankruptcy, receivership, conservatorship, reorganization, or similar proceeding against the association under the laws of this state or any other applicable laws.

b.

No such proceeding shall relieve the association of its Page 19 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 associationobligation, created or purportedotherwise toaffect beits createdability pursuant to anyperform financingits documentsobligation, to securecontinue anyto bondscollect, or otherlevy indebtednessand ofcollect, theassessments, associationmarket shallequalization beor andother remainsurcharges, validprojected andrecoveries enforceable,from notwithstanding the commencementFlorida ofHurricane andCatastrophe duringFund, thereinsurance continuationrecoverables, of,or and after, any rehabilitation,other insolvency,rights, liquidation,revenues, bankruptcy, receivership, conservatorship, reorganization, or similarother proceedingassets againstof the association underpledged. the laws of this state or any other applicable laws.

b.

No such proceeding shall relieve the association of its obligation, or otherwise affect its ability to perform its obligation, to continue to collect, or levy and collect, assessments, market equalization or other surcharges, projected recoveries from the Florida Hurricane Catastrophe Fund, reinsurance recoverables, or any other rights, revenues, or other assets of the association pledged.

As used in this subsection, the term “financing documents” means any agreement, instrument, or other document now existing or hereafter created evidencing any bonds or other indebtedness of the association or pursuant to which any such bonds or other indebtedness has been or may be issued and Pagepursuant 22to which any rights, revenues, or other assets of 105the CODING:association are pledged or sold to secure the repayment of such bonds or indebtedness, together with the payment of interest on such bonds or such indebtedness, or the payment of any other obligation of the association related to such bonds or indebtedness.

e.

Any such pledge or sale of assessments, revenues, contract rights or other rights or assets of the association shall constitute a lien and security interest, or sale, as the Page 20 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 pursuantcase tomay whichbe, anythat rights,is revenues,immediately oreffective otherand assetsattaches ofto thesuch associationassessments, arerevenues, pledgedcontract, or soldother torights secureor theassets, repaymentwhether of such bonds or indebtedness,not togetherimposed with the payment of interest on such bonds or suchcollected indebtedness,at or the paymenttime of any other obligation of the associationpledge relatedor tosale suchis bondsmade. or indebtedness.

e.

Any such pledge or sale of assessments, revenues, contract rights or other rights or assets of the association shall constitute a lien and security interest, or sale, as the case may be, that is immediately effective and attaches to such assessments, revenues, contract, or other rights or assets, whether or not imposed or collected at the time the pledge or sale is made.

There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, agents or employees of the association, members of the board of directors of the association, or the department or its representatives, for any action taken by them in the performance of their duties or Pageresponsibilities 23under ofthis 105subsection. CODING:

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 responsibilities under this subsection.

The Legislature finds that private insurers are unwilling or unable to provide affordable property insurance coveragePage in21 thisof state102 toCODING: the extent sought and needed.

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 coverage in this state to the extent sought and needed.

PageTo 24that end, the corporation shall strive to increase the availability of 105affordable CODING:property insurance in this state, while achieving efficiencies and economies, and while providing service to policyholders, applicants, and agents which is no less than the quality generally provided in the voluntary market, for the achievement of the foregoing public purposes.

Because it is essential for this government entity to have the maximum financial resources to pay claims following a catastrophic hurricane, it is the intent of the Legislature that Page 22 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 To that end, the corporation shallcontinue strive to increasebe thean availabilityintegral part of affordablethe propertystate insuranceand inthat thisthe state,income whileof achievingthe efficienciescorporation andbe economies,exempt andfrom whilefederal providingincome servicetaxation to policyholders, applicants, and agentsthat whichinterest ison no less than the qualitydebt generallyobligations providedissued inby the voluntarycorporation market,be forexempt thefrom achievementfederal ofincome thetaxation. foregoing public purposes.

Because it is essential for this government entity to have the maximum financial resources to pay claims following a catastrophic hurricane, it is the intent of the Legislature that the corporation continue to be an integral part of the state and that the income of the corporation be exempt from federal income taxation and that interest on the debt obligations issued by the corporation be exempt from federal income taxation.

For the purposes of this subsection, residential coverage includes both personal lines residential coverage, which consists of the type of coverage provided by homeowner, mobile home owner, dwelling, tenant, Pagecondominium 25unit ofowner, 105and CODING:similar policies;

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 condominium unit owner, and similar policies;

Effective January 1, 2014, a structure that has a dwelling replacement cost of $1 million or more, or a single condominium unit that has a combined dwelling and contents replacementPage cost23 of $1102 millionCODING: or more, is not eligible for coverage by the corporation.

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 replacement cost of $1 million or more, is not eligible for coverage by the corporation.

Effective January 1, 2016, a structure that has a dwelling replacement cost of $800,000 or more, or a single Pagecondominium 26unit that has a combined dwelling and contents replacement cost of 105$800,000 CODING:or more, is not eligible for coverage by the corporation.

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 condominium unit that has a combined dwelling and contents replacement cost of $800,000 or more, is not eligible for coverage by the corporation.

Effective January 1, 2017, a structure that has a dwelling replacement cost of $700,000 or more, or a single condominium unit that has a combined dwelling and contents replacement cost of $700,000 or more, is not eligible for coveragePage by24 theof corporation.102 CODING:

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Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 coverage by the corporation.

c.

The office may evaluate whether there is a reasonable degree of competition within an individual zip code located in a county that has not been determined by the office to lack a reasonable degree of competition at the county level pursuant to sub-subparagraph b.

If the office determines that such zip code lacks a reasonable degree of competition, structures located within that zip code that have a dwelling replacement cost of $700,000 or more but less than $1 million and single condominium units that have a combined dwelling and contents replacement Page 27 of 105 CODING:

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Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 cost of $700,000 or more but less than $1 million are eligible for coverage from the corporation.

A residential structure is deemed to comply with this sub-subparagraph if it has shutters or opening protectionsPage on25 allof openings102 andCODING: if such opening protections complied with the Florida Building Code at the time they were installed.

b.

Any major structure, as defined in s.

161.54(6)(a), that is newly constructed, or rebuilt, repaired, restored, or remodeled to increase the total square footage of finished area by more than 25 percent, pursuant to a permit applied for after July 1, 2015, is not eligible for coverage by the corporation if the structure is seaward of the coastal construction control Page 28 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 lineprotections establishedon pursuantall toopenings s.and if such opening protections complied with the Florida Building Code at the time they were installed.

b.

Any major structure, as defined in s.

161.54(6)(a), that is newly constructed, or rebuilt, repaired, restored, or remodeled to increase the total square footage of finished area by more than 25 percent, pursuant to a permit applied for after July 1, 2015, is not eligible for coverage by the corporation if the structure is seaward of the coastal construction control line established pursuant to s.

however, insureds who procure one or more subject lines of business in this state pursuant to part VIII of chapter 626 are subject to assessment by the corporation and are referred to collectively as “assessable insureds.” An insurer’s assessment liability begins on the first day of the calendar year following the year in which the insurer was issued a certificatePage of26 authority to transact insurance for subject lines of business102 inCODING: this state and terminates 1 year after the end of the first calendar year during which the insurer no longer holds a certificate of authority to transact insurance for subject lines of business in this state.

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words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 certificate of authority to transact insurance for subject lines of business in this state and terminates 1 year after the end of the first calendar year during which the insurer no longer holds a certificate of authority to transact insurance for subject lines of business in this state.

Pagea.(I) 29A personal lines account for Personal residential policies that provide issued by the corporation which provides comprehensive, multiperil coverage on risks that are not located in areas eligible for coverage by the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for policies that do not provide coverage for the peril of 105wind CODING:on risks that are located in such areas;

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 a.(I) A personal lines account for Personal residential policies that provide issued by the corporation which provides comprehensive, multiperil coverage on risks that are not located in areas eligible for coverage by the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for policies that do not provide coverage for the peril of wind on risks that are located in such areas;

and c.(III) A coastal account for Personal residential policies and commercial residential and commercial nonresidential property policies that provide issued by the corporation which provides coverage for the peril of wind on risks that are located in areas eligible for coverage by the Florida Windstorm UnderwritingPage Association27 asof those102 areasCODING: were defined on January 1, 2002.

The corporation may offer policies that provide multiperil coverage and shall offer policies that provide coverage only for the peril of wind for risks located in areas eligible for coverage by the Florida Windstorm Underwriting Association, as those areas were defined on January 1, 2002 in the coastal account.

Effective July 1, 2014, The corporation may not offer shall cease offering new commercial residential policies providing multiperil coverage but and shall instead Page 30 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 continueUnderwriting toAssociation offeras commercialthose residentialareas wind-onlywere policies,defined andon mayJanuary offer1, commercial2002. residential policies excluding wind.

The corporation may offer policies that provide multiperil coverage and shall offer policies that provide coverage only for the peril of wind for risks located in areas eligible for coverage by the Florida Windstorm Underwriting Association, as those areas were defined on January 1, 2002 in the coastal account.

Effective July 1, 2014, The corporation may not offer shall cease offering new commercial residential policies providing multiperil coverage but and shall instead continue to offer commercial residential wind-only policies, and may offer commercial residential policies excluding wind.

An applicant or insured who is eligible for a corporation policy that provides coverage only for the peril of wind may elect to purchase or retain such policy and also purchasePage or28 retainof coverage102 excludingCODING: wind from an authorized insurer without prejudice to the applicant’s or insured’s eligibility to prospectively purchase a policy that provides multiperil coverage from the corporation.

The following policies, which provide coverage only for the peril of wind, must also include quota share primary insurance under subparagraph (c)2.:

(I) Personal residential policies and commercial residential and commercial nonresidential property policies that Page 31 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 providepurchase coverageor forretain thecoverage perilexcluding of wind onfrom risksan thatauthorized areinsurer locatedwithout inprejudice areasto eligiblethe forapplicant’s coverageor byinsured’s theeligibility Floridato Windstormprospectively Underwritingpurchase Association,a aspolicy thosethat areasprovides weremultiperil definedcoverage onfrom Januarythe 1,corporation. 2002;

The following policies, which provide coverage only for the peril of wind, must also include quota share primary insurance under subparagraph (c)2.:

(I) Personal residential policies and commercial residential and commercial nonresidential property policies that provide coverage for the peril of wind on risks that are located in areas eligible for coverage by the Florida Windstorm Underwriting Association, as those areas were defined on January 1, 2002;

It is the intent of the Legislature that the offer of multiperil coverage inPage the29 coastal account be made and implemented in a manner that does not adversely affect the tax-exempt status of the102 corporationCODING: or creditworthiness of or security for currently outstanding financing obligations or credit facilities of the coastal account, the personal lines account, or the commercial lines account.

The coastal account must also include quota share primary insurance under subparagraph (c)2.

The area eligible for coverage with the corporation under this Page 32 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 sub-subparagraphin under the coastal account alsobe includesmade theand areaimplemented withinin Porta Canaveral,manner whichthat isdoes borderednot onadversely affect the southtax-exempt bystatus of the Citycorporation or creditworthiness of Capeor Canaveral,security borderedfor oncurrently theoutstanding westfinancing byobligations theor Bananacredit River,facilities andof borderedthe oncoastal account, the northpersonal bylines Federalaccount, Governmentor property.the commercial lines account.

The coastal account must also include quota share primary insurance under subparagraph (c)2.

The area eligible for coverage with the corporation under this sub-subparagraph under the coastal account also includes the area within Port Canaveral, which is bordered on the south by the City of Cape Canaveral, bordered on the west by the Banana River, and bordered on the north by Federal Government property.

However, failure to pay the surcharge shall be treated as failure to pay premium.premium Page 30 of 102 CODING:

b.

The three separate accounts must be maintained as long as financing obligations entered into by the Florida Windstorm Underwriting Association or Residential Property and Casualty Joint Underwriting Association are outstanding, in accordance with the terms of the corresponding financing documents.

If no such financing obligations remain outstanding or if the financing documents allow for combining of accounts, the corporation may consolidate the three separate accounts into a new account, to be known as the Citizens account, for all Page 33 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 revenues,b. assets, liabilities, losses, and expenses of the corporation.

The three separate accounts must be maintained as long as financing obligations entered into by the Florida Windstorm Underwriting Association or Residential Property and Casualty Joint Underwriting Association are outstanding, in accordance with the terms of the corresponding financing documents.

If no such financing obligations remain outstanding or if the financing documents allow for combining of accounts, the corporation may consolidate the three separate accounts into a new account, to be known as the Citizens account, for all revenues, assets, liabilities, losses, and expenses of the corporation.

Creditors of the Florida Windstorm Underwriting Association have aPage claim31 against,of and102 recourseCODING: to, the account referred to in sub-sub-subparagraph a.(III) and no claim against, or recourse to, the accounts referred to in sub-sub-subparagraphs a.(I) and (II).

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 a claim against, and recourse to, the account referred to in sub-sub-subparagraph a.(III) and no claim against, or recourse to, the accounts referred to in sub-sub-subparagraphs a.(I) and (II).

The Legislature finds that the revenues of the corporation are revenues that are necessary to meet the Pagerequirements 34set forth in documents authorizing the issuance of 105bonds CODING:under this subsection.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 requirements set forth in documents authorizing the issuance of bonds under this subsection.

(II) Exceeds 2 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year, the corporation shall levy regular assessments on assessable insurers under paragraph (q) and on assessable insureds in an amount equal to the greater of 2 percent of the projected deficit or 2 percent of the aggregate statewide direct writtenPage premium32 for the subject lines of business102 forCODING: the prior calendar year.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 written premium for the subject lines of business for the prior calendar year.

must be in the proportion that the assessable insurer’s direct written premium for the subject lines of business for the year preceding the assessment bears to the aggregate statewide direct written premium for the Pagesubject 35lines of 105business CODING:for that year.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 subject lines of business for that year.

if the three separate accounts in sub-sub- subparagraphsPage 2.a.(I)-(III)33 haveof been102 consolidatedCODING: into the Citizens account pursuant to sub-subparagraph 2.b.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 subparagraphs 2.a.(I)-(III) have been consolidated into the Citizens account pursuant to sub-subparagraph 2.b.

j., the remaining projected deficits in the Citizens personal lines account and in the commercial lines account in a particular calendar year shall Pagebe 36recovered ofthrough 105emergency CODING:assessments under sub- subparagraph c.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 be recovered through emergency assessments under sub- subparagraph c.

The office shall verify the arithmetic calculations involved in the board’s determination within 30 days after receipt of the informationPage on34 whichof the102 determinationCODING: was based.

The office shall notify assessable insurers and the Florida Surplus Lines Service Office of the date on which assessable insurers shall begin to collect and assessable insureds shall begin to pay such assessment.

The date must be at least 90 days after the date the corporation levies emergency assessments pursuant to this sub- subparagraph.

Notwithstanding any other provision of law, the corporation and each assessable insurer that writes subject lines of business shall collect emergency assessments from its Page 37 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 policyholdersinformation withouton suchwhich obligationthe beingdetermination affectedwas bybased. any credit, limitation, exemption, or deferment.

The office shall notify assessable insurers and the Florida Surplus Lines Service Office of the date on which assessable insurers shall begin to collect and assessable insureds shall begin to pay such assessment.

The date must be at least 90 days after the date the corporation levies emergency assessments pursuant to this sub- subparagraph.

Notwithstanding any other provision of law, the corporation and each assessable insurer that writes subject lines of business shall collect emergency assessments from its policyholders without such obligation being affected by any credit, limitation, exemption, or deferment.

The aggregate amount of emergency assessments levied for the Citizens an account in any calendar year may be less than but may not exceed the greater of 10 percent of the amount needed to cover the deficit, plus interest, fees, commissions, required reserves, and other costs associated with financing the original deficit, or 10 percent of the aggregate statewide direct written premium for subject lines of business and the Citizens account all accounts of the corporation for the prior year, plus interest, fees, commissions, required reserves, and other costs associated with financingPage the35 deficit.of 102 CODING:

d.f.

The corporation may pledge the proceeds of assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other insurance and reinsurance recoverables, policyholder surcharges and other surcharges, and other funds available to the corporation as the source of revenue for and to secure bonds issued under paragraph (q), bonds or other indebtedness issued under subparagraph (c)3., or lines of credit or other financing mechanisms issued or created under this Page 38 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 subsection,financing or to retire any other debt incurred as a result of deficits or events giving rise to deficits, or in any other way that the boarddeficit. determines will efficiently recover such deficits.

d.f.

The corporation may pledge the proceeds of assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other insurance and reinsurance recoverables, policyholder surcharges and other surcharges, and other funds available to the corporation as the source of revenue for and to secure bonds issued under paragraph (q), bonds or other indebtedness issued under subparagraph (c)3., or lines of credit or other financing mechanisms issued or created under this subsection, or to retire any other debt incurred as a result of deficits or events giving rise to deficits, or in any other way that the board determines will efficiently recover such deficits.

e.g.Page 36 of 102 CODING:

As used in this subsection and for purposes of any deficit incurred on or after January 25, 2007, the term “subject lines of business” means insurance written by assessable insurers or procured by assessable insureds for all property and casualty lines of business in this state, but not including workers’ compensation or medical malpractice.

As used in this sub-subparagraph, the term “property and casualty lines of business” includes all lines of business identified on Form 2, Exhibit of Premiums and Losses, in the annual statement required Page 39 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 ofe.g. authorized insurers under s.

As used in this subsection and for purposes of any deficit incurred on or after January 25, 2007, the term “subject lines of business” means insurance written by assessable insurers or procured by assessable insureds for all property and casualty lines of business in this state, but not including workers’ compensation or medical malpractice.

As used in this sub-subparagraph, the term “property and casualty lines of business” includes all lines of business identified on Form 2, Exhibit of Premiums and Losses, in the annual statement required of authorized insurers under s.

The Florida Surplus Lines Service Office shall verify the proper application by surplus lines agents of assessment percentages for regular assessments and emergency assessments levied under this subparagraph on assessable insureds and assist the corporation in ensuring the accurate, timely collection and payment of assessments by surplus lines agents as required by thePage corporation.37 of 102 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 the corporation.

(II) The surcharge is payable upon cancellation or Pagetermination 40of the policy, upon renewal of 105the CODING:policy, or upon issuance of a new policy by the corporation within the first 12 months after the date of the levy or the period of time necessary to fully collect the surcharge amount.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 termination of the policy, upon renewal of the policy, or upon issuance of a new policy by the corporation within the first 12 months after the date of the levy or the period of time necessary to fully collect the surcharge amount.

If the amount of any assessments or surcharges collected from corporation policyholders, assessable insurers or their policyholders, or assessable insureds exceeds the amount of the deficits, such excess amounts shall be remitted to and retained by the corporation in a reserve to be used by the corporation, as determined by the board of governors and approved by the office, to pay claims or reduce any past, present, or future plan-year deficits or to reduce outstanding debt.Page 38 of 102 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 debt.

Pageb. 41 of 105 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 b.

The corporation may not offer new commercial residential policies providing multiperil coverage, but shall continue to offer commercial residential wind-only policies, and may offer commercialPage residential39 policiesof excluding102 wind.CODING:

However, the corporation may continue to renew a commercial residential multiperil policy on a building that was insured by the corporation on June 30, 2014, under a multiperil policy.

In issuing multiperil coverage under this sub-subparagraph, the corporation may use its approved policy forms and rates for risks located in areas not eligible for coverage by the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for policies that do not provide Page 42 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 coveragecommercial forresidential thepolicies perilexcluding ofwind. wind on risks that are located in such areas.

However, the corporation may continue to renew a commercial residential multiperil policy on a building that was insured by the corporation on June 30, 2014, under a multiperil policy.

In issuing multiperil coverage under this sub-subparagraph, the corporation may use its approved policy forms and rates for risks located in areas not eligible for coverage by the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for policies that do not provide coverage for the peril of wind on risks that are located in such areas.

Personal residential policies and commercial residential and commercial nonresidential property policies that provide coverage for the peril of wind on risks that are located in areas eligible for coverage by the Florida Windstorm Underwriting Association, as those areas were defined on January 1,Page 2002;40 of 102 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 1, 2002;

The area eligible for Pagecoverage 43with the corporation under this sub-subparagraph includes the area within Port Canaveral, which is bordered on the south by the City of 105Cape CODING:Canaveral, bordered on the west by the Banana River, and bordered on the north by Federal Government property.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 coverage with the corporation under this sub-subparagraph includes the area within Port Canaveral, which is bordered on the south by the City of Cape Canaveral, bordered on the west by the Banana River, and bordered on the north by Federal Government property.

However, failure toPage pay41 theof surcharge102 shallCODING: be treated as failure to pay premium.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 to pay the surcharge shall be treated as failure to pay premium.

Upon a determination by the board of governors that a projected deficit in the Citizens account exceeds the amount that is expected to be recovered through surcharges under sub- Pagesubparagraph 44a., the board, after verification by the office, shall levy emergency assessments for as many years as necessary to cover the deficits, to be collected by assessable insurers and the corporation and collected from assessable insureds upon issuance or renewal of 105policies CODING:for subject lines of business, excluding National Flood Insurance Program policies.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 subparagraph a., the board, after verification by the office, shall levy emergency assessments for as many years as necessary to cover the deficits, to be collected by assessable insurers and the corporation and collected from assessable insureds upon issuance or renewal of policies for subject lines of business, excluding National Flood Insurance Program policies.

Notwithstanding any other law, the corporation and each assessable insurer that writesPage subject42 lines of business102 shallCODING: collect emergency assessments from its policyholders without such obligation being affected by any credit, limitation, exemption, or deferment.

Emergency assessments levied by the corporation on assessable insureds shall be collected by the surplus lines agent at the time the surplus lines agent collects the surplus lines tax required by s.

626.932 and paid to the Florida Surplus Lines Service Office at the time the surplus lines agent pays the surplus lines tax to that office.

The emergency assessments Page 45 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 collectedwrites shallsubject belines transferredof directlybusiness toshall thecollect corporationemergency onassessments afrom periodicits basispolicyholders aswithout determinedsuch byobligation thebeing corporationaffected and held by theany corporationcredit, solelylimitation, inexemption, theor Citizensdeferment. account.

Emergency assessments levied by the corporation on assessable insureds shall be collected by the surplus lines agent at the time the surplus lines agent collects the surplus lines tax required by s.

626.932 and paid to the Florida Surplus Lines Service Office at the time the surplus lines agent pays the surplus lines tax to that office.

The emergency assessments collected shall be transferred directly to the corporation on a periodic basis as determined by the corporation and held by the corporation solely in the Citizens account.

or to retire anyPage other43 debt incurred as a result of deficits102 orCODING: events giving rise to deficits, or in any other way that the board determines will efficiently recover such deficits.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 any other debt incurred as a result of deficits or events giving rise to deficits, or in any other way that the board determines will efficiently recover such deficits.

are not part of an insurer’s Pagerates, 46are ofnot 105premium, CODING:and are not subject to premium tax, fees, or commissions;

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 rates, are not premium, and are not subject to premium tax, fees, or commissions;

624.424 and any rule adopted under this section, except for those lines identified as accidentPage and44 healthof insurance102 andCODING: except for policies written under the National Flood Insurance Program or the Federal Crop Insurance Program.

For purposes of this sub-subparagraph, the term “workers’ compensation” includes both workers’ compensation insurance and excess workers’ compensation insurance.

f.

The Florida Surplus Lines Service Office shall annually determine the aggregate statewide written premium in subject lines of business procured by assessable insureds and report that information to the corporation in a form and at a time the Page 47 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 corporationaccident specifiesand tohealth ensureinsurance thatand theexcept corporationfor canpolicies meetwritten under the requirementsNational ofFlood thisInsurance subsectionProgram andor the corporation’sFederal financingCrop obligations.Insurance Program.

For purposes of this sub-subparagraph, the term “workers’ compensation” includes both workers’ compensation insurance and excess workers’ compensation insurance.

f.

The Florida Surplus Lines Service Office shall annually determine the aggregate statewide written premium in subject lines of business procured by assessable insureds and report that information to the corporation in a form and at a time the corporation specifies to ensure that the corporation can meet the requirements of this subsection and the corporation’s financing obligations.

Must provide for adoption of residential property and casualtyPage insurance45 policyof forms102 andCODING: commercial residential and nonresidential property insurance forms, which must be approved by the office before use.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 casualty insurance policy forms and commercial residential and nonresidential property insurance forms, which must be approved by the office before use.

Basic personal lines policy forms that are policies Pagesimilar 48to an HO-8 policy or a dwelling fire policy that provide coverage meeting the requirements of 105the CODING:secondary mortgage market, but which is more limited than the coverage under a standard policy.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 similar to an HO-8 policy or a dwelling fire policy that provide coverage meeting the requirements of the secondary mortgage market, but which is more limited than the coverage under a standard policy.

The corporation may adopt variations of the policy forms listedPage in46 sub-subparagraphsof a.-e.102 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 listed in sub-subparagraphs a.-e.

627.4025(2)(a), for eligible risks, and adopt Pageproperty 49insurance forms for eligible risks which cover the peril of 105wind CODING:only.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 property insurance forms for eligible risks which cover the peril of wind only.

(I) “Approved surplus lines insurer” means an eligible surplus lines insurerinsurer: that:

(A) HasThat has a financial strength rating of “A-”“A” or higher from A.M.

(B) HasThat has a personal lines residential risk program that is managed by a Florida resident surplus lines broker;

and (C) AppliesThat tooffers the office to participate in the take-out process to offer coverage to applicants for new coverage from the corporation or current policyholders of the corporation through a take-out plan approved by the office;office.

(D) Files rates for review as part of a take-out plan with the office.

The office shall review whether the premium is more than 20 percent greater than the premium for comparable coverage from the corporation;

and (E) Provides data to the office related to coverage and rates in a format promulgated by the commission.

The corporation and authorized insurer are each solely responsible for a specified percentage of hurricane coverage of an eligible risk as set Page 5047 of 105102 CODING:

Florida Senate - 2024 CS for CSSB 1716 597-02636-24 20241716c1 authorized insurer are each solely responsible for SBa 1716specified 594-03834-24percentage 20241716c2of hurricane coverage of an eligible risk as set forth in a quota share primary insurance agreement between the corporation and an authorized insurer and the insurance contract.

However, thePage corporation’s48 quotaof share102 primaryCODING: insurance coverage level may not exceed 90 percent.

Page 51 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 d.the corporation’s quota share primary insurance coverage level may not exceed 90 percent.

d.

The corporation board shall establish in its plan of operation standards for quota share agreements which ensure that there is no discriminatory application among insurers as to the terms of the agreements, pricing of the agreements, incentive provisions if any, and consideration paid for servicing policies orPage adjusting49 claims.of 102 CODING:

h.

The quota share primary insurance agreement between the Page 52 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 corporationor andadjusting anclaims. authorized insurer must set forth the specific terms under which coverage is provided, including, but not limited to, the sale and servicing of policies issued under the agreement by the insurance agent of the authorized insurer producing the business, the reporting of information concerning eligible risks, the payment of premium to the corporation, and arrangements for the adjustment and payment of hurricane claims incurred on eligible risks by the claims adjuster and personnel of the authorized insurer.

h.

The quota share primary insurance agreement between the corporation and an authorized insurer must set forth the specific terms under which coverage is provided, including, but not limited to, the sale and servicing of policies issued under the agreement by the insurance agent of the authorized insurer producing the business, the reporting of information concerning eligible risks, the payment of premium to the corporation, and arrangements for the adjustment and payment of hurricane claims incurred on eligible risks by the claims adjuster and personnel of the authorized insurer.

in the absence of a hurricane or other weather-related event, upon a determination by the corporation, subject to approval by the office, that such action would enable it to efficiently meet the financial obligations of the corporation and that such Page 5350 of 105102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 office, that such action would enable it to efficiently meet the financial obligations of the corporation and that such financings are reasonably necessary to effectuate the requirements of this subsection.

At least one of the two members appointed by each appointing officer must have demonstratedPage expertise51 in insurance and be deemed to be within the scope of the102 exemptionCODING: provided in s.

112.313(7)(b).

The Page 54 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 Chiefdemonstrated Financialexpertise Officerin shallinsurance designateand onebe deemed to be within the scope of the appointeesexemption asprovided chair.in s.

112.313(7)(b).

The Chief Financial Officer shall designate one of the appointees as chair.

four representatives, one appointed by the Florida Association of Insurance Agents, one by the Florida Association of Insurance and Financial Advisors, one by the Page 5552 of 105102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 the Florida Association of Insurance Agents, one by the Florida Association of Insurance and Financial Advisors, one by the Professional Insurance Agents of Florida, and one by the Latin American Association of Insurance Agencies;

627.3517, with respect to personal lines residential risks that are primary residences, if the risk is offered coverage from an authorized insurer at the insurer’s approved rate under a standard policy including wind coverage or, if consistent with the insurer’s underwriting rules as filed with the office, a basic policy including wind coverage, for a new application to the corporation for coverage, the risk is not eligible for any policy issued by the corporation unless the premium for coverage from the authorized insurer is more than 20 percent greater than the premium for comparable coverage from Page 5653 of 105102 CODING:

Florida Senate - 2024 CS for CSSB 1716 597-02636-24 20241716c1 premium for SBcoverage 1716from 594-03834-24the 20241716c2authorized insurer is more than 20 percent greater than the premium for comparable coverage from the corporation.

(I) If the risk accepts an offer of coverage through the market assistance plan or through a mechanism established by the Page 5754 of 105102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 (I) If the risk accepts an offer of coverage through the market assistance plan or through a mechanism established by the corporation other than a plan established by s.

(A) Pay to the producing agent of record, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equalPage to55 the usual and customary commission of the102 corporation;CODING:

or Page 58 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 (B)equal Offer to allow the producing agent of record to continue servicing the policy for at least 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission forof the typecorporation; of policy written.

or (B) Offer to allow the producing agent of record to continue servicing the policy for at least 1 year and offer to pay the agent the greater of the insurer’s or the corporation’s usual and customary commission for the type of policy written.

SubjectWith respect to s.commercial lines residential risks, for a new application to the corporation for coverage, if the risk is offered coverage under a policy including wind coverage from an authorized insurer at its approved rate, the risk is not eligible for a policy issued by the corporation unless the premium for coverage from the authorized insurer is more than 20 percent greater than the premium for comparable coverage from the corporation.

627.3517,Whenever withan respectoffer toof personalcoverage linesfor residentiala riskscommercial thatlines areresidential not primary residences, if the risk is offeredreceived coveragefor froma anpolicyholder authorizedof insurer at the insurer’scorporation approvedat raterenewal or from an approvedauthorized surplusinsurer, lines insurer at the rate approved by the office as part of such surplus lines insurer’s take-out plan for a new application to the corporation for coverage, the risk is not eligible for anycoverage policywith issued by the corporation unless the premium for coverage from the authorized insurer or approved surplus lines insurer is more than 20 percent greater than the corporation’s renewal premium for comparable coveragecoverage. from the corporation.

WheneverIf anthe offer of coverage for a personal lines residential risk that is not aable primaryto residenceobtain isany received for a policyholder of the corporation at renewal from an authorized insurer at the insurer’s approved rate or an approved surplus lines insurer at the rate approved by the office as part of such insurer’soffer, take-out plan, the risk is not eligible for coveragea withpolicy theincluding corporationwind unless the premium for coverage fromissued theby authorized insurer or approved surplus lines insurer is more than 20 percent greater than the corporation’scorporation. renewal premium for comparable coverage for policies that renew on or after July 1, 2024.

IfA policyholder removed from the riskcorporation isthrough notan Pageassumption 59agreement remains eligible for coverage from the corporation until the end of 105the CODING:policy term.

However, any policy removed from the corporation through an Page 56 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 ableassumption toagreement obtainremains suchon offer, the riskcorporation’s is eligible for a standard policy includingforms windthrough coveragethe orend aof basicthe policy includingterm. wind coverage issued by the corporation.

If the risk could not be insured under a standard policy including wind coverage regardless of market conditions, the risk is eligible for a basic policy including wind coverage unless rejected under subparagraph 8.

The corporation shall determine the type of policy to be provided on the basis of objective standards specified in the underwriting manual and based on generally accepted underwriting practices.

A policyholder removed from the corporation through an assumption agreement does not remain eligible for coverage from the corporation after the end of the policy term.

However, any policy removed from the corporation through an assumption agreement remains on the corporation’s policy forms through the end of the policy term.

627.3518, before a policy is issued to the risk by the corporation or during the first 30 days of coverage by the corporation, and the producing agent who submitted the application to the plan or to the corporation is not currently appointed by the insurer, the insurer must:shall:

or (B) Offer to allow the producing agent of record of the Pagepolicy 60to continue servicing the policy for at least 1 year and offer to pay the agent the greater of 105the CODING:insurer’s or the corporation’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

(II) If the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on the policy, and the insurer shall:

(A) Pay to the producing agent of record, for the first Page 57 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 policyyear, toan continueamount servicingthat is the policygreater forof atthe leastinsurer’s 1usual year and offercustomary tocommission payfor the agenttype the greater of thepolicy insurer’swritten or thea corporation’sfee equal to the usual and customary commission forof the typecorporation; of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer must pay the agent in accordance with sub-sub-sub-subparagraph (A).

(II) If the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on the policy, and the insurer must:

(A) Pay to the producing agent of record, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation;

c.b.c.

WithFor respectpurposes toof commercialdetermining linescomparable residential risks, for a new application to the corporation for coverage, if the risk is offered coverage under asub-subparagraphs policya. including wind coverage from an authorized insurer at its approved rate, the risk is not Page 61 of 105 CODING:

and b., the comparison must be based on those forms and coverages that are reasonably comparable.

The corporation may rely on a determination of comparable coverage and premium made by the producing agent who submits the application to the corporation, made in the agent’s capacity as the corporation’s agent.

For purposes of comparing the premium for comparable coverage under sub-subparagraphs a.

and b., premium includes any surcharge or assessment that is actually applied to such policy.

A comparison may be made solely of the premium with respect to the main building or structure only on the following basis:

the same Coverage A or other building limits;

the same percentage hurricane deductible that applies on an annual basis or that applies to each hurricane for commercial residential property;

the same percentage of ordinance and law coverage, if the same limit is offered by both the corporation and the authorized insurer;

the same mitigation credits, to the Page 58 of 102 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 eligibleextent for a policy issued by the corporationsame unlesstypes theof premiumcredits forare coverageoffered fromboth theby authorized insurer is more than 20 percent greater than the premiumcorporation forand comparable coverage from the corporation.authorized insurer;

Wheneverthe ansame offermethod of coverage for aloss commercialpayment, linessuch residentialas riskreplacement iscost receivedor foractual acash policyholdervalue, ofif the corporationsame atmethod renewal from an authorized insurer, the risk is notoffered eligibleboth forby coverage with the corporation unlessand the premium for coverage from the authorized insurer isin moreaccordance thanwith 20underwriting percentrules; greater than the corporation’s renewal premium for comparable coverage.

Ifand the risk is not able to obtain any suchother offer,form theor riskcoverage that is eligiblereasonably forcomparable aas policydetermined including wind coverage issued by the corporation.board.

AIf policyholderan removedapplication fromis submitted to the corporation throughfor anwind-only assumptioncoverage agreementon remainsa risk that is located in an area eligible for coverage fromby the corporationFlorida untilWindstorm Underwriting Association, as that area was defined on January 1, 2002, the endpremium offor the corporation’s wind-only policy term.plus the premium for the ex-wind policy that is offered by an authorized insurer to the applicant must be compared to the premium for multiperil coverage offered by an authorized insurer, subject to the standards for comparison specified in this subparagraph.

If the corporation or the applicant requests from the authorized insurer a breakdown of the premium of the offer by types of coverage so that a comparison may be made by the corporation or its agent and the authorized insurer refuses or is unable to provide such information, the corporation may treat the offer as not being an offer of coverage from an authorized insurer at the insurer’s approved rate.

However, notwithstanding any other law, this sub-subparagraph does not apply to a personal lines residential policy that does not cover a primary residence.

d.

Subject to s.

627.3517, with respect to personal lines residential risks that are not primary residences, if the risk is offered coverage from an authorized insurer at the insurer’s approved rate or from an approved surplus lines insurer at the Page 59 of 102 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 1716 597-02636-24 20241716c1 rate approved by the office as part of such surplus lines insurer’s take-out plan for a new application to the corporation for coverage, the risk is not eligible for any policy issued by the corporation.

Whenever an offer of coverage for a personal lines residential risk that is not a primary residence is received for a policyholder of the corporation at renewal from an authorized insurer at the insurer’s approved rate or an approved surplus lines insurer at the rate approved by the office as part of such insurer’s take-out plan, the risk is not eligible for coverage with the corporation for policies that renew on or after July 1, 2024.

If the risk is not able to obtain such offer, the risk is eligible for a standard policy including wind coverage or a basic policy including wind coverage issued by the corporation.

If the risk could not be insured under a standard policy including wind coverage regardless of market conditions, the risk is eligible for a basic policy including wind coverage unless rejected under subparagraph 8.

The corporation shall determine the type of policy to be provided on the basis of objective standards specified in the underwriting manual and based on generally accepted underwriting practices.

A policyholder removed from the corporation through an assumption agreement does not remain eligible for coverage from the corporation after the end of the policy term.

627.3518, before aPage policy60 is issued to the risk by the corporation or during the first 30 days of coverage102 byCODING: the corporation, and the producing agent who submitted the application to the plan or the corporation is not currently appointed by the insurer, the insurer shall:

(A) Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the Page 62 of 105 CODING:

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24597-02636-24 20241716c220241716c1 corporation;a policy is issued to the risk by the corporation or during the first 30 days of coverage by the corporation, and the producing agent who submitted the application to the plan or to the corporation is not currently appointed by the insurer, the insurer shall:

(A) Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer’s usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation;

or (B) Offer to allow the producing agent of record to continuePage servicing61 the policy for at least 1 year and offer to pay the agent the greater of the102 insurer’sCODING: or the corporation’s usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

d.c.

For purposes of determining comparable coverage under sub-subparagraphs a., and b., and c., the comparison must be Page 63 of 105 CODING:

Florida Senate - 2024 CS for CSSB 1716 597-02636-24 20241716c1 continue servicing the policy for SBat 1716least 594-03834-241 20241716c2year basedand onoffer thoseto formspay the agent the greater of the insurer’s or the corporation’s usual and coveragescustomary thatcommission arefor reasonablythe comparable.type of policy written.

TheIf corporationthe mayproducing relyagent onis aunwilling determinationor ofunable comparableto coverageaccept andappointment, premium made by the producingnew agentinsurer whoshall submitspay the applicationagent to the corporation, made in theaccordance agent’swith capacitysub-sub-sub-subparagraph as(A). the corporation’s agent.

For purposes of comparing the premium for comparable coverage under sub-subparagraphs a., and b., and c.

premium includes any surcharge or assessment that is actually applied to such policy.

A comparison may be made solely of the premium with respect to the main building or structure only on the following basis:

the same Coverage A or other building limits;

the same percentage hurricane deductible that applies on an annual basis or that applies to each hurricane for commercial residential property;

the same percentage of ordinance and law coverage, if the same limit is offered by both the corporation and the authorized insurer or the approved surplus line insurer;

the same mitigation credits, to the extent the same types of credits are offered both by the corporation and the authorized insurer or the approved surplus lines insurer;

the same method for loss payment, such as replacement cost or actual cash value, if the same method is offered both by the corporation and the authorized insurer in accordance with underwriting rules;

and any other form or coverage that is reasonably comparable as determined by the board.

If an application is submitted to the corporation for wind-only coverage on a risk that is located in an area eligible for coverage by the Florida Windstorm Underwriting Association, as that area was defined on January 1, 2002, the premium for the corporation’s wind-only policy plus the premium for the ex-wind policy that is offered by an authorized insurer to the applicant Page 64 of 105 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 1716 594-03834-24 20241716c2 must be compared to the premium for multiperil coverage offered by an authorized insurer, subject to the standards for comparison specified in this subparagraph.

If the corporation or the applicant requests from the authorized insurer or the approved surplus lines insurer a breakdown of the premium of the offer by types of coverage so that a comparison may be made by the corporation or its agent and the authorized insurer or the approved surplus lines insurer refuses or is unable to provide such information, the corporation may treat the offer as not being an offer of coverage from an authorized insurer at the insurer’s approved rate.

Such surplus must be available to defray deficits in the Citizens account as to future years and used for that purpose before assessing Pageassessable 65insurers ofand 105assessable CODING:insureds as to any calendar year.