Florida Senate - 2022 SB 1728 By Senator Boyd 21-01768A-22 20221728__ Page 1 of 58 CODING: Words stricken are deletions; words underlined are additions. A bill to be entitled 1

An act relating to property insurance; amending s. 2 489.147, F.S.; revising the definition of the term 3 “prohibited advertisement”; amending s. 627.351, F.S.; 4 deleting obsolete provisions related to eligibility 5 thresholds for personal lines residential cover age 6 with the Citizens Property Insurance Corporation; 7 requiring the corporation to use a method for valuing 8 dwelling replacement costs which is approved by the 9 Office of Insurance Regulation; specifying 10 qualifications requirements for certain members of th e 11 board of governors for the corporation; revising 12 conditions for eligibility for coverage with the 13 corporation; providing for a required limited annual 14 rate increase for specified polices; defining the term 15 “primary residence”; providing that eligible surplus 16 lines insurers may participate, in the same manner and 17 on the same terms as an authorized insurer, in 18 depopulation, take-out, or keepout programs relating 19 to policies removed from Citizens Property Insurance 20 Corporation; providing certain exceptions, conditions, 21 and requirements relating to such participation by a 22 surplus lines insurer in the corporation’s 23 depopulation, take-out, or keepout programs; providing 24 thresholds for eligibility for coverage by the 25 corporation for risks that are offered coverage from 26 qualified surplus lines insurers; authorizing 27 information from underwriting files and confidential 28 claims files to be released under certain 29

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 2 of 58 CODING: Words stricken are deletions; words underlined are additions. circumstances by the corporation to specified entities 30 that consider writing or underwriting risks insured b y 31 the corporation; specifying that only the 32 corporation’s transfer of a policy file to an insurer, 33 as opposed to the transfer of any file, changes the 34 file’s public record status; revising the contents of 35 a specified notice provided by the corporation; 36 amending s. 627.3518, F.S.; deleting an obsolete 37 provision related to implementing the clearinghouse 38 program by a specified date; deleting an obsolete 39 reporting requirement; conforming provisions to 40 changes made by the act; amending s. 627.7011, F.S.; 41 providing that certain provisions relating to 42 homeowners’ policies do not prohibit insurers from 43 providing limited coverage on personal lines 44 residential property insurance policies by including 45 roof surface type reimbursement schedules; providing 46 requirements for roof surface type reimbursement 47 schedules; authorizing the conversion of a residential 48 property insurance policy to a roof surface type 49 reimbursement

schedule under certain circumstances; 50 providing that certain provisions relating to 51 homeowners’ policies do not prohibit insurers from 52 providing coverage on personal lines residential 53 property insurance policies that limits roof coverage 54 to a stated value sublimit of coverage; providing 55 requirements for stated value sublimits of coverages; 56 providing that certain provisions relating to 57 homeowners’ policies do not prohibit certain insurers 58

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 3 of 58 CODING: Words stricken are deletions; words underlined are additions. from offering roof reimbursement on the basis of 59 replacement costs; reenacting ss. 624.424(10), 60 627.3517, and 627.712(1), F.S., relating to annual 61 insurer statements, consumer choice, and required 62 residential windstorm coverage, respectively, to 63 incorporate the amendments made to s. 627.351, F.S., 64 in references thereto; providing an effective date. 65 66 Be It Enacted by the Legislature of the State of Florida: 67 68

Section 1. Paragraph (

a) of subsection (1) of

section 69 489.147, Florida Statutes, is amended to read: 70 489.147 Prohibited property insurance practices.— 71

(1) As used in this section, the term: 72 (a) “Prohibited advertisement” means any written or 73 electronic communication by a contractor which that encourages, 74 instructs, or induces a consumer to contact a contractor or 75 public adjuster for the purpose of making an insurance claim for 76 roof damage, if such communication does not state in a font size 77 of at least 12 points and at least half as large as the largest 78 font size used in the communication that: 79 1. The consumer is responsible for payment of any insurance 80 deductible; 81 2.

It is insurance fraud punishable as a felony of the 82 third degree for a contractor to pay, waive, or rebate all or 83 part of an insurance deductible applicable to payment to the 84 contractor for repairs to property covered by a property 85 insurance policy; and 86 3. It is insurance fraud punishable as a felony of the 87

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 4 of 58 CODING: Words stricken are deletions; words underlined are additions. third degree to intentionally file an insurance claim containing 88 any false, incomplete, or misleading information . 89 90 The term includes, but is not limited to, door hangers, business 91 cards, magnets, flyers, pamphlets, and e-mails. 92

Section 2. Paragraphs (a), (c), (n), (q), (x), and (ii) of 93 subsection (6) of

section 627.351, Florida Statutes, are amended 94 to read: 95 627.351 Insurance risk apportionment plans.— 96

(6) CITIZENS PROPERTY INSURANCE CORPORATION.— 97 (

a) The public purpose of this subsection is to ensure that 98 there is an orderly market for property insurance for residents 99 and businesses of this state. 100 1. The Legislature finds that private insurers are 101 unwilling or unable to provide affordable property insurance 102 coverage in this state to the extent sought and needed. The 103 absence of affordable property insurance threatens the public 104 health, safety, and welfare and likewise threatens the economic 105 health of the state.

The state therefore has a compelling public 106 interest and a public purpose to assist in assuring that 107 property in this the state is insured and that it is insured at 108 affordable rates so as to facilitate the remediation, 109 reconstruction, and replacement of damaged or destroyed property 110 in order to reduce or avoid the negative effects otherwise 111 resulting to the public health, safety, and welfare, to the 112 economy of the state, and to the revenues of the state and local 113 governments which are needed to provide for the public welfare. 114 It is necessary, therefore, to provide affordable property 115 insurance to applicants who are in good faith entitled to 116

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 5 of 58 CODING: Words stricken are deletions; words underlined are additions. procure insurance through the voluntary market but are u nable to 117 do so.

The Legislature intends, therefore, that affordable 118 property insurance be provided and that it continue to be 119 provided, as long as necessary, through Citizens Property 120 Insurance Corporation, a government entity that is an integral 121 part of the state, and that is not a private insurance company. 122 To that end, the corporation shall strive to increase the 123 availability of affordable property insurance in this state, 124 while achieving efficiencies and economies, and while providing 125 service to policyholders, applicants, and agents which is no 126 less than the quality generally provided in the voluntary 127 market, for the achievement of the foregoing public purposes. 128 Because it is essential for this government entity to have the 129 maximum financial resources to pay claims following a 130 catastrophic hurricane, it is the intent of the Legislature that 131 the corporation continue to be an integral part of the state and 132 that the income of the corporation be exempt from federal income 133 taxation and that interest on the debt obligations issued by the 134 corporation be exempt from federal income taxation. 135 2.

The Residential Property and Casualty Joint Underwriting 136 Association originally created by this statute shall be known as 137 the Citizens Property Insurance Corporation. The co rporation 138 shall provide insurance for residential and commercial property, 139 for applicants who are entitled, but, in good faith, are unable 140 to procure insurance through the voluntary market. The 141 corporation shall operate pursuant to a plan of operation 142 approved by order of the Financial Services Commission. The plan 143 is subject to continuous review by the commission.

The 144 commission may, by order, withdraw approval of all or part of a 145

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 6 of 58 CODING: Words stricken are deletions; words underlined are additions. plan if the commission determines that conditions have changed 146 since approval was granted and that the purposes of the plan 147 require changes in the plan.

For the purposes of this 148 subsection, residential coverage includes both personal lines 149 residential coverage, which consists of the type of coverage 150 provided by homeowner, mobile home owner, dwelling, tenant, 151 condominium unit owner, and similar policies; and commercial 152 lines residential coverage, which consists of the type of 153 coverage provided by condominium association, apartment 154 building, and similar policies. 155 3. With respect to coverage for personal lines residential 156 structures, and: 157 a.

Effective January 1, 2014, a structure that has a 158 dwelling replacement cost of $1 million or more, or a single 159 condominium unit that has a combined dwelling and contents 160 replacement cost of $1 million or more, is not eligible for 161 coverage by the corporation. Such dwellings insured by the 162 corporation on December 31, 2013, may continue to be covered by 163 the corporation until the end of the policy term.

The office 164 shall approve the method used by the corporation for valuing the 165 dwelling replacement cost for the purposes of this subparagraph. 166 If a policyholder is insured by the corporation before being 167 determined to be ineligible pursuant to this subparagraph and 168 such policyholder files a lawsuit challenging the determination, 169 the policyholder may remain insured by the corporation until the 170 conclusion of the litigation. 171 b.

Effective January 1, 2015, a structure that has a 172 dwelling replacement cost of $900,000 or more, or a single 173 condominium unit that has a combined dwelling and contents 174

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 7 of 58 CODING: Words stricken are deletions; words underlined are additions. replacement cost of $900,000 or more, is not eligible for 175 coverage by the corporation. Such dwellings insured by the 176 corporation on December 31, 2014, may continue to be covered by 177 the corporation only until the end of the policy term. 178 c.

Effective January 1, 2016, a structure that has a 179 dwelling replacement cost of $800,000 or more, or a single 180 condominium unit that has a combined dwelling and contents 181 replacement cost of $800,000 or more, is not eligible for 182 coverage by the corporation.

Such dwellings insured by the 183 corporation on December 31, 2015, may continue to be covered by 184 the corporation until the end of the policy term. 185 d. effective January 1, 2017, a structure that has a 186 dwelling replacement cost of $700,000 or more, or a single 187 condominium unit that has a combined dwelling and contents 188 replacement cost of $700,000 or more, is not eligible for 189 coverage by the corporation.

The corporation must use a method 190 for valuing the dwelling replacement cost which is approved by 191 the office Such dwellings insured by the corporation on December 192 31, 2016, may continue to be covered by the corporation until 193 the end of the policy term. The requirements of sub-194 subparagraphs b.-d. do not apply However, in counties where the 195 office determines there is not a reasonable degree of 196 competition,.

In such counties a personal lines residential 197 structure that has a dwelling replacement cost of less than $1 198 million, or a single condominium unit that has a combined 199 dwelling and contents replacement cost of less than $1 million, 200 is eligible for coverage by the corporation. 201 4. It is the intent of the Legislature that policyholders, 202 applicants, and agents of the corporation receive service and 203

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 8 of 58 CODING: Words stricken are deletions; words underlined are additions. treatment of the highest possible level but never less tha n that 204 generally provided in the voluntary market. It is also intended 205 that the corporation be held to service standards no less than 206 those applied to insurers in the voluntary market by the office 207 with respect to responsiveness, timeliness, customer court esy, 208 and overall dealings with policyholders, applicants, or agents 209 of the corporation. 210 5.a.

Effective January 1, 2009, a personal lines 211 residential structure that is located in the “wind -borne debris 212 region,” as defined in s. 1609.2, International Buildin g Code 213 (2006), and that has an insured value on the structure of 214 $750,000 or more is not eligible for coverage by the corporation 215 unless the structure has opening protections as required under 216 the Florida Building Code for a newly constructed residential 217 structure in that area.

A residential structure is deemed to 218 comply with this sub-subparagraph if it has shutters or opening 219 protections on all openings and if such opening protections 220 complied with the Florida Building Code at the time they were 221 installed. 222 b.

Any major structure, as defined in s. 161.54(6)(a), that 223 is newly constructed, or rebuilt, repaired, restored, or 224 remodeled to increase the total square footage of finished area 225 by more than 25 percent, pursuant to a permit applied for after 226 July 1, 2015, is not eligible for coverage by the corporation if 227 the structure is seaward of the coastal construction control 228 line established pursuant to s. 161.053 or is within the Coastal 229 Barrier Resources System as designated by 16 U.S.C. ss. 3501 -230 3510. 231 6. With respect to wind-only coverage for commercial lines 232

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 9 of 58 CODING: Words stricken are deletions; words underlined are additions. residential condominiums, effective July 1, 2014, a condominium 233 shall be deemed ineligible for coverage if 50 percent or more of 234 the units are rented more than eight times in a calendar year 235 for a rental agreement period of less than 30 days. 236 (

c) The corporation’s plan of operation: 237 1. Must provide for adoption of residential property and 238 casualty insurance policy forms and commercial residential and 239 nonresidential property insurance forms, which must be ap proved 240 by the office before use. The corporation shall adopt the 241 following policy forms: 242 a. Standard personal lines policy forms that are 243 comprehensive multiperil policies providing full coverage of a 244 residential property equivalent to the coverage provide d in the 245 private insurance market under an HO-3, HO-4, or HO-6 policy. 246 b.

Basic personal lines policy forms that are policies 247 similar to an HO-8 policy or a dwelling fire policy that provide 248 coverage meeting the requirements of the secondary mortgage 249 market, but which is more limited than the coverage under a 250 standard policy. 251 c. Commercial lines residential and nonresidential policy 252 forms that are generally similar to the basic perils of full 253 coverage obtainable for commercial residential structures and 254 commercial nonresidential structures in the admitted voluntary 255 market. 256 d.

Personal lines and commercial lines residential property 257 insurance forms that cover the peril of wind only. The forms are 258 applicable only to residential properties located in areas 259 eligible for coverage under the coastal account referred to in 260 sub-subparagraph (b)2.a. 261

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 10 of 58 CODING: Words stricken are deletions; words underlined are additions. e. Commercial lines nonresidential property insurance forms 262 that cover the peril of wind only. The forms are applicable only 263 to nonresidential properties located in areas e ligible for 264 coverage under the coastal account referred to in sub -265 subparagraph (b)2.a. 266 f. The corporation may adopt variations of the policy forms 267 listed in sub-subparagraphs a.-e. which contain more restrictive 268 coverage. 269 g.

Effective January 1, 2013, the corporation shall offer a 270 basic personal lines policy similar to an HO-8 policy with 271 dwelling repair based on common construction materials and 272 methods. 273 2. Must provide that the corporation adopt a program in 274 which the corporation and authorized insurers e nter into quota 275 share primary insurance agreements for hurricane coverage, as 276 defined in s. 627.4025(2)(a), for eligible risks, and adopt 277 property insurance forms for eligible risks which cover the 278 peril of wind only. 279 a.

As used in this subsection, the term: 280 (I) “Quota share primary insurance” means an arrangement in 281 which the primary hurricane coverage of an eligible risk is 282 provided in specified percentages by the corporation and an 283 authorized insurer. The corporation and authorized insurer are 284 each solely responsible for a specified percentage of hurricane 285 coverage of an eligible risk as set forth in a quota share 286 primary insurance agreement between the corporation and an 287 authorized insurer and the insurance contract.

The 288 responsibility of the corporation or authorized insurer to pay 289 its specified percentage of hurricane losses of an eligible 290

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 11 of 58 CODING: Words stricken are deletions; words underlined are additions. risk, as set forth in the agreement, may not be altered by the 291 inability of the other party to pay its specified percentage of 292 losses.

Eligible risks that are provided hurricane coverage 293 through a quota share primary insurance arrangement must be 294 provided policy forms that set forth the obligations of the 295 corporation and authorized insurer under the arrangement, 296 clearly specify the percentages of quota share primary in surance 297 provided by the corporation and authorized insurer, and 298 conspicuously and clearly state that the authorized insurer and 299 the corporation may not be held responsible beyond their 300 specified percentage of coverage of hurricane losses. 301 (II) “Eligible risks” means personal lines residential and 302 commercial lines residential risks that meet the underwriting 303 criteria of the corporation and are located in areas that were 304 eligible for coverage by the Florida Windstorm Underwriting 305 Association on January 1, 2002. 306 b.

The corporation may enter into quota share primary 307 insurance agreements with authorized insurers at corporation 308 coverage levels of 90 percent and 50 percent. 309 c. If the corporation determines that additional coverage 310 levels are necessary to maximize participation in quota share 311 primary insurance agreements by authorized insurers, the 312 corporation may establish additional coverage levels. However, 313 the corporation’s quota share primary insurance coverage level 314 may not exceed 90 percent. 315 d.

Any quota share primary insurance agreement entered into 316 between an authorized insurer and the corporation must provide 317 for a uniform specified percentage of coverage of hurricane 318 losses, by county or territory as set forth by the corporation 319

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 12 of 58 CODING: Words stricken are deletions; words underlined are additions. board, for all eligible risks of the authorized insurer covered 320 under the agreement. 321 e. Any quota share primary insurance agreement entered into 322 between an authorized insurer and the corporation is subject to 323 review and approval by the office. However, such agreement shall 324 be authorized only as to insurance contracts entered into 325 between an authorized insurer and an insured who is already 326 insured by the corporation for wind coverage. 327 f.

For all eligible risks covered under quota share primary 328 insurance agreements, the exposure and coverage levels for both 329 the corporation and authorized insurers shall be reported by the 330 corporation to the Florida Hurricane Catastrophe Fund. For all 331 policies of eligible risks covered under such agreements, the 332 corporation and the authorized insurer must maintain complete 333 and accurate records for the purpose of exposure and loss 334 reimbursement audits as required by fund rules.

The corporation 335 and the authorized insurer shall each maintain duplicate copies 336 of policy declaration pages and supporting claims do cuments. 337 g. The corporation board shall establish in its plan of 338 operation standards for quota share agreements which ensure that 339 there is no discriminatory application among insurers as to the 340 terms of the agreements, pricing of the agreements, incentive 341 provisions if any, and consideration paid for servicing policies 342 or adjusting claims. 343 h.

The quota share primary insurance agreement between the 344 corporation and an authorized insurer must set forth the 345 specific terms under which coverage is provided, inclu ding, but 346 not limited to, the sale and servicing of policies issued under 347 the agreement by the insurance agent of the authorized insurer 348

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 13 of 58 CODING: Words stricken are deletions; words underlined are additions. producing the business, the reporting of information concerning 349 eligible risks, the payment of premium to the corporati on, and 350 arrangements for the adjustment and payment of hurricane claims 351 incurred on eligible risks by the claims adjuster and personnel 352 of the authorized insurer. Entering into a quota sharing 353 insurance agreement between the corporation and an authorized 354 insurer is voluntary and at the discretion of the authorized 355 insurer. 356 3.

May provide that the corporation may employ or otherwise 357 contract with individuals or other entities to provide 358 administrative or professional services that may be appropriate 359 to effectuate the plan. The corporation may borrow funds by 360 issuing bonds or by incurring other indebtedness, and shall have 361 other powers reasonably necessary to effectuate the requirements 362 of this subsection, including, without limitation, the power to 363 issue bonds and incur other indebtedness in order to refinance 364 outstanding bonds or other indebtedness.

The corporation may 365 seek judicial validation of its bonds or other indebtedness 366 under

chapter 75. The corporation may issue bonds or incur other 367 indebtedness, or have bonds issued on its behalf by a unit of 368 local government pursuant to subparagraph (q)2. in the absence 369 of a hurricane or other weather-related event, upon a 370 determination by the corporation, subject to approval by the 371 office, that such action would enable it to efficiently meet the 372 financial obligations of the corporation and that such 373 financings are reasonably necessary to effectuate the 374 requirements of this subsection.

The corporation may take all 375 actions needed to facilitate tax-free status for such bonds or 376 indebtedness, including formation of trusts or other affiliated 377

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 14 of 58 CODING: Words stricken are deletions; words underlined are additions. entities. The corporation may pledge assessments, projected 378 recoveries from the Florida Hurricane Catastrophe Fund, other 379 reinsurance recoverables, policyholder surcharges and other 380 surcharges, and other funds available to the corporation as 381 security for bonds or other indebtedness. In recognition of s. 382 10, Art.

I of the State Constitution, prohibiting the impairment 383 of obligations of contracts, it is the intent of the Legislature 384 that no action be taken whose purpose is to impair any bond 385 indenture or financing agreement or any revenue source committed 386 by contract to such bond or other indebtedness. 387 4.

Must require that the corporation operate subject to the 388 supervision and approval of a board of governors consisting of 389 nine individuals who are residents of this state and who are 390 from different geographical areas of the state, one of whom is 391 appointed by the Governor and serves solely to advocate on 392 behalf of the consumer. The appointment of a consumer 393 representative by the Governor is deemed to be within the scope 394 of the exemption provided in s. 112.313(7)(

b) and is in addition 395 to the appointments authorized under sub-subparagraph a. 396 a. The Governor, the Chief Financial Officer, the Pr esident 397 of the Senate, and the Speaker of the House of Representatives 398 shall each appoint two members of the board.

At least one of the 399 two members appointed by each appointing officer must have 400 demonstrated expertise in insurance of at least 10 years’ 401 experience with property and casualty insurance as a full -time 402 employee, officer, or owner of a licensed insurance agency, an 403 insurer authorized to transact property insurance in this state, 404 or an insurance trade association and be deemed to be within the 405 scope of the exemption provided in s. 112.313(7)(b). The Chief 406

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 15 of 58 CODING: Words stricken are deletions; words underlined are additions. Financial Officer shall designate one of the appointees with 407 demonstrated expertise in insurance as chair. All board members 408 serve at the pleasure of the appointing officer. All members of 409 the board are subject to removal at will by the officers who 410 appointed them. All board members, including the chair, must be 411 appointed to serve for 3-year terms beginning annually on a date 412 designated by the plan.

However, for the first term beginning on 413 or after July 1, 2009, each appointing officer shall appoint one 414 member of the board for a 2-year term and one member for a 3-415 year term. A board vacancy shall be filled for the unexpired 416 term by the appointing officer. The Chief Financial Officer 417 shall appoint a technical advisory group to provide information 418 and advice to the board in connection with the board’s duties 419 under this subsection. The executive director and senior 420 managers of the corporation shall be engaged by the board and 421 serve at the pleasure of the board.

The executive director must 422 have the experience, character, and qualifications required 423 under s. 624.404(3) to serve as the chief executive officer of 424 an insurer. Any executive director appointed on or after July 1, 425 2006, is subject to confirmation by the Senate. The executive 426 director is responsible for employing other staff as the 427 corporation may require, subject to review and concurrence by 428 the board. 429 b.

The board shall create a Market Accountability Advisory 430 Committee to assist the corporation in developing awareness of 431 its rates and its customer and agent service levels in 432 relationship to the voluntary market insurers writing similar 433 coverage. 434 (

I) The members of the advisory committee consist of the 435

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 16 of 58 CODING: Words stricken are deletions; words underlined are additions. following 11 persons, one of whom must be elected chair by the 436 members of the committee: four representatives, one appointed by 437 the Florida Association of Insurance Agents, one by the Florida 438 Association of Insurance and Financial Advisors, one by the 439 Professional Insurance Agents of Florida, and one by the Latin 440 American Association of Insurance Agencies; three 441 representatives appointed by the insurers with the three highest 442 voluntary market share of residential property insurance 443 business in the state; one representative from the Office of 444 Insurance Regulation; one consumer appointed by the board who is 445 insured by the corporation at the time of appointment to the 446 committee; one representative appointed by the Florida 447 Association of Realtors; and one representative appointed by the 448 Florida Bankers Association.

All members shall be appointed to 449 3-year terms and may serve for consecutive terms. 450 (II) The committee shall report to the corporation at each 451 board meeting on insurance market issues which may include rates 452 and rate competition with the voluntary market; service, 453 including policy issuance, claims processing, and general 454 responsiveness to policyholders, applicants, and agents; and 455 matters relating to depopulation. 456 5. Must provide a procedure for determining the eligibility 457 of a risk for coverage, as follows: 458 a.

Subject to s. 627.3517, with respect to personal lines 459 residential risks, if the risk is offered coverage from an 460 authorized insurer at the insurer’s approved rate under a 461 standard policy including wind coverage or, if consistent with 462 the insurer’s underwriting rules as filed with the office, a 463 basic policy including wind coverage, for a new application to 464

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 17 of 58 CODING: Words stricken are deletions; words underlined are additions. the corporation for coverage, the risk is not eligible for any 465 policy issued by the corporation unless the premium for coverage 466 from the authorized insurer is more than 20 percent greater than 467 the premium for comparable coverage from the corporation. 468 Whenever an offer of coverage for a personal lines residential 469 risk is received for a policyholder of the corporation at 470 renewal from an authorized insurer, if the offer is equal to or 471 less than the corporation’s renewal premium for comparable 472 coverage, the risk is not eligible for coverage with the 473 corporation unless the premium for coverage from the authorized 474 insurer is more than 20 percent greater than the renewal premium 475 for comparable coverage from the corporation.

If the risk is not 476 able to obtain such offer, the risk is eligible for a standard 477 policy including wind coverage or a basic policy including wind 478 coverage issued by the corporation; however, if the risk could 479 not be insured under a standard policy including wind coverage 480 regardless of market conditions, the risk is eligible for a 481 basic policy including wind coverage unless rejected under 482 subparagraph 8.

However, A policyholder removed from the 483 corporation through an assumption agreement is not remains 484 eligible for coverage from the corporation until the end of the 485 assumption period. The corporation shall determine the type of 486 policy to be provided on the basis of objective standar ds 487 specified in the underwriting manual and based on generally 488 accepted underwriting practices. 489 (

I) If the risk accepts an offer of coverage through the 490 market assistance plan or through a mechanism established by the 491 corporation other than a plan established by s. 627.3518, before 492 a policy is issued to the risk by the corporation or during the 493

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 18 of 58 CODING: Words stricken are deletions; words underlined are additions. first 30 days of coverage by the corporation, and the producing 494 agent who submitted the application to the plan or to the 495 corporation is not currently appointed by the insurer, the 496 insurer shall: 497 (

A) Pay to the producing agent of record of the policy for 498 the first year, an amount that is the greater of the insurer’s 499 usual and customary commission for the type of policy written or 500 a fee equal to the usual and customary commission of the 501 corporation; or 502 (

B) Offer to allow the producing agent of record of the 503 policy to continue servicing the policy for at least 1 year and 504 offer to pay the agent the greater of the insurer’s or the 505 corporation’s usual and customary commission for the type of 506 policy written. 507 508 If the producing agent is unwilling or unable to accept 509 appointment, the new insurer shall pay the agent in accordance 510 with sub-sub-sub-subparagraph (A). 511 (II) If the corporation enters into a contractual agreement 512 for a take-out plan, the producing agent of record of the 513 corporation policy is entitled to retain any unearned commission 514 on the policy, and the insurer shall: 515 (

A) Pay to the producing agent of record, for the first 516 year, an amount that is the greater of the insurer’s usual and 517 customary commission for the type of policy written or a fee 518 equal to the usual and customary commission of the corporation; 519 or 520 (

B) Offer to allow the producing agent of record to 521 continue servicing the policy for at least 1 year and offe r to 522

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 19 of 58 CODING: Words stricken are deletions; words underlined are additions. pay the agent the greater of the insurer’s or the corporation’s 523 usual and customary commission for the type of policy written. 524 525 If the producing agent is unwilling or unable to accept 526 appointment, the new insurer shall pay the agent in accordance 527 with sub-sub-sub-subparagraph (A). 528 b.

With respect to commercial lines residential risks, for 529 a new application to the corporation for coverage, if the risk 530 is offered coverage under a policy including wind coverage from 531 an authorized insurer at its approved rate, the risk is not 532 eligible for a policy issued by the corporation unless the 533 premium for coverage from the authorized insurer is more than 20 534 15 percent greater than the premium for comparable coverage from 535 the corporation.

Whenever an offer of coverage for a commercial 536 lines residential risk is received for a policyholder of the 537 corporation at renewal from an authorized insurer, if the offer 538 is equal to or less than the corporation’s renewal premium for 539 comparable coverage, the risk is not eligible for coverage with 540 the corporation unless the premium for coverage from the 541 authorized insurer is more than 20 percent greater than the 542 renewal premium for comparable coverage from the corporation .

If 543 the risk is not able to obtain any such offer, the risk is 544 eligible for a policy including wind coverage issued by the 545 corporation. However, A policyholder removed from the 546 corporation through an assumption agreement is not remains 547 eligible for coverage from the corporation until the end of the 548 assumption period. 549 (

I) If the risk accepts an offer of coverage through the 550 market assistance plan or through a mechanism established by the 551

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 20 of 58 CODING: Words stricken are deletions; words underlined are additions. corporation other than a plan established by s. 627.3518, before 552 a policy is issued to the risk by the corporation or during the 553 first 30 days of coverage by the corporation, and the producing 554 agent who submitted the application to the plan or the 555 corporation is not currently appointed by the insurer, the 556 insurer shall: 557 (

A) Pay to the producing agent of record of the policy, for 558 the first year, an amount that is the greater of the insurer’s 559 usual and customary commission for the type of policy written or 560 a fee equal to the usual and customary commission of the 561 corporation; or 562 (

B) Offer to allow the producing agent of record of the 563 policy to continue servicing the policy for at least 1 year and 564 offer to pay the agent the greater of the insurer’s or the 565 corporation’s usual and customary commission for the type of 566 policy written. 567 568 If the producing agent is unwilling or unable to accept 569 appointment, the new insurer shall pay the agent in accordance 570 with sub-sub-sub-subparagraph (A). 571 (II) If the corporation enters into a contractual agreement 572 for a take-out plan, the producing agent of record of the 573 corporation policy is entitled to retain any un earned commission 574 on the policy, and the insurer shall: 575 (

A) Pay to the producing agent of record, for the first 576 year, an amount that is the greater of the insurer’s usual and 577 customary commission for the type of policy written or a fee 578 equal to the usual and customary commission of the corporation; 579 or 580

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 21 of 58 CODING: Words stricken are deletions; words underlined are additions. (

B) Offer to allow the producing agent of record to 581 continue servicing the policy for at least 1 year and offer to 582 pay the agent the greater of the insurer’s or the corporation’s 583 usual and customary commission for the type of policy written. 584 585 If the producing agent is unwilling or unable to accept 586 appointment, the new insurer shall pay the agent in accordance 587 with sub-sub-sub-subparagraph (A). 588 c. For purposes of determining comparable coverage under 589 sub-subparagraphs a. and b., the comparison must be based on 590 those forms and coverages that are reasonably comparable.

The 591 corporation may rely on a determination of comparable coverage 592 and premium made by the producing agent who submits the 593 application to the corporation, made in the agent’s capacity as 594 the corporation’s agent.

A comparison may be made solely of the 595 premium with respect to the main building or structure only on 596 the following basis: the same coverage A or other building 597 limits; the same percentage hurricane deductible that applies on 598 an annual basis or that applies to each hurricane for commercial 599 residential property; the same percentage of ordinance and law 600 coverage, if the same limit is offered by both the corporation 601 and the authorized insurer; the same mitigation credits, to the 602 extent the same types of credits are offered both by the 603 corporation and the authorized insurer; the same method for loss 604 payment, such as replacement cost or actual cash value, if the 605 same method is offered both by the corporation and the 606 authorized insurer in accordance with underwriting rules; and 607 any other form or coverage that is reasonably comparable as 608 determined by the board.

If an application is submitted to the 609

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 22 of 58 CODING: Words stricken are deletions; words underlined are additions. corporation for wind-only coverage in the coastal account, the 610 premium for the corporation’s wind-only policy plus the premium 611 for the ex-wind policy that is offered by an authorized insurer 612 to the applicant must be compared to the premium for multiperil 613 coverage offered by an authorized insurer, subject to t he 614 standards for comparison specified in this subparagraph.

If the 615 corporation or the applicant requests from the authorized 616 insurer a breakdown of the premium of the offer by types of 617 coverage so that a comparison may be made by the corporation or 618 its agent and the authorized insurer refuses or is unable to 619 provide such information, the corporation may treat the offer as 620 not being an offer of coverage from an authorized insurer at the 621 insurer’s approved rate. 622 6. Must include rules for classifications of risks and 623 rates. 624 7.

Must provide that if premium and investment income for 625 an account attributable to a particular calendar year are in 626 excess of projected losses and expenses for the account 627 attributable to that year, such excess shall be held in surplus 628 in the account. Such surplus must be available to defray 629 deficits in that account as to future years and used for that 630 purpose before assessing assessable insurers and assessable 631 insureds as to any calendar year. 632 8.

Must provide objective criteria and procedures to be 633 uniformly applied to all applicants in determining whether an 634 individual risk is so hazardous as to be uninsurable. In making 635 this determination and in establishing the criteria and 636 procedures, the following must be considered: 637 a. Whether the likelihood of a loss for the individual risk 638

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 23 of 58 CODING: Words stricken are deletions; words underlined are additions. is substantially higher than for other risks of the same class; 639 and 640 b. Whether the uncertainty associated with the individual 641 risk is such that an appropriate premium cannot be determined. 642 643 The acceptance or rejection of a risk by the corporation shall 644 be construed as the private placement of insurance, and the 645 provisions of

chapter 120 do not apply. 646 9. Must provide that the corporation make its best efforts 647 to procure catastrophe reinsurance at reasonable rates, t o cover 648 its projected 100-year probable maximum loss as determined by 649 the board of governors. If catastrophe reinsurance is not 650 available at reasonable rates, the corporation need not purchase 651 it, but the corporation shall include the costs of reinsurance 652 to cover its projected 100-year probable maximum loss in its 653 rate calculations even if it does not purchase catastrophe 654 reinsurance. 655 10.

The policies issued by the corporation must provide 656 that if the corporation or the market assistance plan obtains an 657 offer from an authorized insurer to cover the risk at its 658 approved rates, the risk is no longer eligible for renewal 659 through the corporation, except as otherwise provided in this 660 subsection. 661 11. Corporation policies and applications must include a 662 notice that the corporation policy could, under this section, be 663 replaced with a policy issued by an authorized insurer which 664 does not provide coverage identical to the coverage provided by 665 the corporation.

The notice must also specify that acceptance of 666 corporation coverage creates a conclusive presumption that the 667

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 24 of 58 CODING: Words stricken are deletions; words underlined are additions. applicant or policyholder is aware of this potential. 668 12.

May establish, subject to approval by the office, 669 different eligibility requirements and operational procedures 670 for any line or type of coverage for any specified county or 671 area if the board determines that such changes are justified due 672 to the voluntary market being sufficiently stable and 673 competitive in such area or for such line or type of coverage 674 and that consumers who, in good faith, are unabl e to obtain 675 insurance through the voluntary market through ordinary methods 676 continue to have access to coverage from the corporation.

If 677 coverage is sought in connection with a real property transfer, 678 the requirements and procedures may not provide an effe ctive 679 date of coverage later than the date of the closing of the 680 transfer as established by the transferor, the transferee, and, 681 if applicable, the lender. 682 13.

Must provide that, with respect to the coastal account, 683 any assessable insurer with a surplus as to policyholders of $25 684 million or less writing 25 percent or more of its total 685 countrywide property insurance premiums in this state may 686 petition the office, within the first 90 days of each calendar 687 year, to qualify as a limited apportionment company.

A regular 688 assessment levied by the corporation on a limited apportionment 689 company for a deficit incurred by the corporation for the 690 coastal account may be paid to the corporation on a monthly 691 basis as the assessments are collected by the limited 692 apportionment company from its insureds, but a limited 693 apportionment company must begin collecting the regular 694 assessments not later than 90 days after the regular assessments 695 are levied by the corporation, and the regular assessments must 696

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 25 of 58 CODING: Words stricken are deletions; words underlined are additions. be paid in full within 15 months after being levied by the 697 corporation. A limited apportionment company shall collect from 698 its policyholders any emergency assessment imposed under sub -699 subparagraph (b)3.d.

The plan must provide that, if the office 700 determines that any regular assessment will result in an 701 impairment of the surplus of a limited apportionment company, 702 the office may direct that all or part of such assessment be 703 deferred as provided in subparagraph (q)4. However, an emergency 704 assessment to be collected from policyholders u nder sub-705 subparagraph (b)3.d. may not be limited or deferred. 706 14.

Must provide that the corporation appoint as its 707 licensed agents only those agents who throughout such 708 appointments also hold an appointment as defined in s. 626.015 709 by an insurer who is authorized to write and is actually writing 710 or renewing personal lines residential property coverage, 711 commercial residential property coverage, or commercial 712 nonresidential property coverage within the state. 713 15. Must provide a premium payment plan option to its 714 policyholders which, at a minimum, allows for quarterly and 715 semiannual payment of premiums.

A monthly payment plan may, but 716 is not required to, be offered. 717 16. Must limit coverage on mobile homes or manufactured 718 homes built before 1994 to actual cash value of the dwelling 719 rather than replacement costs of the dwelling. 720 17. Must provide coverage for manufactured or mobile home 721 dwellings. Such coverage must also include the following 722 attached structures: 723 a. Screened enclosures that are aluminum framed or s creened 724 enclosures that are not covered by the same or substantially the 725

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 26 of 58 CODING: Words stricken are deletions; words underlined are additions. same materials as those of the primary dwelling; 726 b. Carports that are aluminum or carports that are not 727 covered by the same or substantially the same materials as those 728 of the primary dwelling; and 729 c.

Patios that have a roof covering that is constructed of 730 materials that are not the same or substantially the same 731 materials as those of the primary dwelling. 732 733 The corporation shall make available a policy for mobile homes 734 or manufactured homes for a minimum insured value of at least 735 $3,000. 736 18. May provide such limits of coverage as the board 737 determines, consistent with the requirements of this subsection. 738 19. May require commercial property to meet specified 739 hurricane mitigation construction features as a condition of 740 eligibility for coverage. 741 20.

Must provide that new or renewal policies issued by the 742 corporation on or after January 1, 2012, which cover sinkhole 743 loss do not include coverage for any loss to appurtenant 744 structures, driveways, sidewalks, decks, or patios that are 745 directly or indirectly caused by sinkhole activity. The 746 corporation shall exclude such coverage using a notice of 747 coverage change, which may be included with the policy renewal, 748 and not by issuance of a notice of nonrenewal of the excluded 749 coverage upon renewal of the current policy. 750 21.

As of January 1, 2012, must require that the agent 751 obtain from an applicant for coverage from the corporation an 752 acknowledgment signed by the applicant, which includes, at a 753 minimum, the following statement: 754

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 27 of 58 CODING: Words stricken are deletions; words underlined are additions. 755 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE 756 AND ASSESSMENT LIABILITY: 757 758 1.

AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE 759 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A 760 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY O THER REASON, 761 MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND 762 PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE 763 POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT 764 OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLO RIDA 765 LEGISLATURE. 766 2.

I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER 767 SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM, 768 BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO 769 BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST T RY TO OBTAIN 770 PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE 771 WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES 772 ARE REGULATED AND APPROVED BY THE STATE. 773 3.

I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY 774 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER 775 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE 776 FLORIDA LEGISLATURE. 777 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE 778 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE 779 STATE OF FLORIDA. 780 781 a. The corporation shall maintain, in electronic format or 782 otherwise, a copy of the applicant’s signed acknowledgment and 783

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 28 of 58 CODING: Words stricken are deletions; words underlined are additions. provide a copy of the statement to the policyholder as part of 784 the first renewal after the effective date of this subparagraph. 785 b. The signed acknowledgment form creates a conclusive 786 presumption that the policyholder understood and accepted his or 787 her potential surcharge and assessment liability as a 788 policyholder of the corporation. 789 (n)1.

Rates for coverage provided by the corporation mus t 790 be actuarially sound and subject to s. 627.062, except as 791 otherwise provided in this paragraph. The corporation shall file 792 its recommended rates with the office at least annually. The 793 corporation shall provide any additional information regarding 794 the rates which the office requires. The office shall consider 795 the recommendations of the board and issue a final order 796 establishing the rates for the corporation within 45 days after 797 the recommended rates are filed.

The corporation may not pursue 798 an administrative challenge or judicial review of the final 799 order of the office. 800 2. In addition to the rates otherwise determined pursuant 801 to this paragraph, the corporation shall impose and collect an 802 amount equal to the premium tax provided in s. 624.509 to 803 augment the financial resources of the corporation. 804 3.

After the public hurricane loss-projection model under 805 s. 627.06281 has been found to be accurate and reliable by the 806 Florida Commission on Hurricane Loss Projection Methodology, the 807 model shall be considered when establishing the windstorm 808 portion of the corporation’s rates. The corporation may use the 809 public model results in combination with the results of private 810 models to calculate rates for the windstorm portion of the 811 corporation’s rates. This subparagraph does not require or allow 812

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 29 of 58 CODING: Words stricken are deletions; words underlined are additions. the corporation to adopt rates lower than the rates otherwise 813 required or allowed by this paragraph. 814 4. The corporation must make a recommended actuarially 815 sound rate filing for each personal and commercial line of 816 business it writes. 817 5.

Notwithstanding the board’s recommended rates and the 818 office’s final order regarding the corporation’s filed rates 819 under subparagraph 1., the corporation shall annually implement 820 a rate increase which, except for sinkhole coverage, does not 821 exceed the following for any single personal lines residential 822 policy issued by the corporation that covers an insured’s 823 primary residence, and any single commercial lines residential 824 policy issued by the corporation, excluding coverage changes and 825 surcharges: 826 a. Eleven percent for 2022. 827 b. Twelve percent for 2023. 828 c.

Thirteen percent for 2024. 829 d. Fourteen percent for 2025. 830 e. Fifteen percent for 2026 and all subsequent years. 831 6. The corporation may also implement an increase to 832 reflect the effect on the corporation of the cash buildup factor 833 pursuant to s. 215.555(5)(b). 834 7. The corporation’s implementation of rates as prescribed 835 in subparagraph 5. shall cease for any line of business written 836 by the corporation upon the corporation’s implementation of 837 actuarially sound rates.

Thereafter, the corporation shall 838 annually make a recommended actuarially sound rate filing for 839 each commercial and personal line of business the corporation 840 writes. 841

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 30 of 58 CODING: Words stricken are deletions; words underlined are additions. 8. As used in this paragraph, “primary residence” means the 842 dwelling that the insured has represented as their permanent 843 home on the insurance application or otherwise to the 844 corporation. 845 (q)1.

The corporation shall certify to the office its needs 846 for annual assessments as to a particular calendar year, and for 847 any interim assessments that it deems to be necessary to sustain 848 operations as to a particular year pending the receipt of annual 849 assessments. Upon verification, the office shall approve such 850 certification, and the corporation shall levy such annual or 851 interim assessments. Such assessments shall be prorated as 852 provided in paragraph (b).

The corporation shall take all 853 reasonable and prudent steps necessary to collect the amount of 854 assessments due from each assessable insurer, including, if 855 prudent, filing suit to collect the assessments, and the office 856 may provide such assistance to the corporation it deems 857 appropriate.

If the corporation is unable to collect an 858 assessment from any assessable insurer, the uncollected 859 assessments shall be levied as an additional assessment against 860 the assessable insurers and any assessable insurer required to 861 pay an additional assessment as a result of such failure to pay 862 shall have a cause of action against such nonpaying assessable 863 insurer. Assessments shall be included as an appropriate factor 864 in the making of rates.

The failure of a surplus lines agent to 865 collect and remit any regular or emergency assessment levied by 866 the corporation is considered to be a violation of s. 626.936 867 and subjects the surplus lines agent to the penalties provided 868 in that section. 869 2. The governing body of any unit of local government, any 870

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 31 of 58 CODING: Words stricken are deletions; words underlined are additions. residents of which are insured by the corporation, may issue 871 bonds as defined in s. 125.013 or s. 166.101 from time to time 872 to fund an assistance program, in conjunction with the 873 corporation, for the purpose of defraying deficits of the 874 corporation.

In order to avoid needless and indiscriminate 875 proliferation, duplication, and fragmentation of such assistance 876 programs, any unit of local government, any residents of which 877 are insured by the corporation, may provide for the payment of 878 losses, regardless of whether or not the losses occurred within 879 or outside of the territorial jurisdiction of the local 880 government. Revenue bonds under this subparagraph may not be 881 issued until validated pursuant to

chapter 75, unless a state of 882 emergency is declared by executive order or proclamation of the 883 Governor pursuant to s. 252.36 making such findings as are 884 necessary to determine that it is in the best interests of, and 885 necessary for, the protection of the public health, safety, and 886 general welfare of residents of this state and declaring it an 887 essential public purpose to permit certain municipalities or 888 counties to issue such bonds as will permit relief to claimants 889 and policyholders of the corporation.

Any such unit of local 890 government may enter into such contracts with the corporation 891 and with any other entity created pursuant to this subsection as 892 are necessary to carry out this paragraph. Any bonds issued 893 under this subparagraph shall be payable from and secured by 894 moneys received by the corporation from emergency assessments 895 under sub-subparagraph (b)3.d., and assigned and pledged to or 896 on behalf of the unit of local government for the benefit of the 897 holders of such bonds.

The funds, credit, property , and taxing 898 power of the state or of the unit of local government shall not 899

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 32 of 58 CODING: Words stricken are deletions; words underlined are additions. be pledged for the payment of such bonds. 900 3.a. The corporation shall adopt one or more programs 901 subject to approval by the office for the reduction of both new 902 and renewal writings in the corporation.

Beginning January 1, 903 2008, any program the corporation adopts for the payment of 904 bonuses to an insurer for each risk the insurer removes from the 905 corporation shall comply with s. 627.3511(2) and may not exceed 906 the amount referenced in s. 627.3511(2) for each risk removed. 907 The corporation may consider any prudent and not unfairly 908 discriminatory approach to reducing corporation writings, and 909 may adopt a credit against assessment liability or other 910 liability that provides an incentive for insurers to take risks 911 out of the corporation and to keep risks out of the corporation 912 by maintaining or increasing voluntary writings in counties or 913 areas in which corporation risks are highly concentrated and a 914 program to provide a formula under which an insurer voluntarily 915 taking risks out of the corporation by maintaining or increasing 916 voluntary writings will be relieved wholly or partially from 917 assessments under sub-subparagraph (b)3.a.

However, any “take-918 out bonus” or payment to an insurer must be conditioned on the 919 property being insured for at least 5 years by the insurer, 920 unless canceled or nonrenewed by the policyholder. If the policy 921 is canceled or nonrenewed by the policyholder before the end of 922 the 5-year period, the amount of the take-out bonus must be 923 prorated for the time period the policy was insured.

When the 924 corporation enters into a contractual agreement for a take -out 925 plan, the producing agent of record of the corporation policy is 926 entitled to retain any unearned commission on such polic y, and 927 the insurer shall either: 928

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 33 of 58 CODING: Words stricken are deletions; words underlined are additions. (

I) Pay to the producing agent of record of the policy, for 929 the first year, an amount which is the greater of the insurer’s 930 usual and customary commission for the type of policy written or 931 a policy fee equal to the usual and customary commission of the 932 corporation; or 933 (II) Offer to allow the producing agent of record of the 934 policy to continue servicing the policy for a period of not less 935 than 1 year and offer to pay the agent the insurer’s usual and 936 customary commission for the type of policy written.

If the 937 producing agent is unwilling or unable to accept appointment by 938 the new insurer, the new insurer shall pay the agent in 939 accordance with sub-sub-subparagraph (I). 940 b. Any credit or exemption from regular assessments adopted 941 under this subparagraph shall last no longer than the 3 years 942 following the cancellation or expiration of the policy by the 943 corporation.

With the approval of the office, the board may 944 extend such credits for an additional year if the insurer 945 guarantees an additional year of renewability for all policies 946 removed from the corporation, or for 2 additional years if the 947 insurer guarantees 2 additional years of renewability for all 948 policies so removed. 949 c. There shall be no credit, limitation, exemption, or 950 deferment from emergency assessments to be collected from 951 policyholders pursuant to sub-subparagraph (b)3.d. 952 d.

Notwithstanding any other law, for purposes of a 953 depopulation, take-out, or keepout program adopted by the 954 corporation, including an initial or renewal offer of coverage 955 made to a policyholder removed from the corporation pursuant to 956 such program, an eligible surplus lines insurer may participate 957

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 34 of 58 CODING: Words stricken are deletions; words underlined are additions. in the program in the same manner and on the same terms as an 958 authorized insurer, except as provided under this sub-959 subparagraph. 960 (

I) To qualify for participation, the surplus lines insurer 961 must first obtain approval from the office for its depopulation, 962 take-out, or keepout plan and then comply with all of the 963 corporation’s requirements for the plan applicable to admitted 964 insurers and with all statutory provisions applicable to the 965 removal of policies from the corporation. 966 (II) In considering a surplus lines insurer’s request for 967 approval for its plan, the office shall determine whether the 968 surplus lines insurer meets the following requirements: 969 (

A) Maintains a surplus of $50 million on a company or 970 pooled basis; 971 (

B) Has a superior, excellent, exceptional, or equally 972 comparable financial strength rating by a rating agency 973 acceptable to the office; 974 (

C) Maintains reserves, surplus, reinsurance, and 975 reinsurance equivalents sufficient to cover the insurer’s 100 -976 year probable maximum hurricane loss at least twice in a single 977 hurricane season and submits such reinsurance to the office to 978 review for purposes of the take-out; 979 (

D) Provides prominent notice to the policyholder before 980 the assumption of the policy that surplus lines policies are not 981 provided coverage by the Florida Insurance Guaranty Association 982 and provides an outline of any substantial differences in 983 coverage between the existing policy and the policy being 984 offered to the insured; and 985 (

E) Provides policy coverage similar to that provided by 986

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 35 of 58 CODING: Words stricken are deletions; words underlined are additions. the corporation. 987 (III) To obtain approval for a plan, the surplus lines 988 insurer must file the following with the office: 989 (

A) Information requested by the office to demonstrate 990 compliance with s. 624.404(3), including biographical 991 affidavits, fingerprints processed pursuant to s. 624.34, and 992 the results of criminal history records checks f or officers and 993 directors of the insurer and its parent or holding company; 994 (

B) A service-of-process consent and agreement form 995 executed by the insurer; 996 (

C) Proof that the insurer has been an eligible or 997 authorized insurer for at least 3 years; 998 (

D) A duly authenticated copy of the insurer’s current 999 audited financial statement, in English, which, in the case of 1000 statements originally made in the currencies of other countries, 1001 expresses all monetary values in United States dollars, at an 1002 exchange rate then current and shown in the statement, and 1003 including any additional information relative to the insurer as 1004 the office may request; 1005 (

E) A complete certified copy of the latest official 1006 financial statement required by the insurer’s domiciliary state, 1007 if different from the statement required by sub-sub-sub-1008 subparagraph (D); and 1009 (

F) If applicable, a copy of the United States trust 1010 account agreement. 1011 1012 This sub-sub-subparagraph does not subject any surplus lines 1013 insurer to requirements in addition to

part VIII of chapt er 626. 1014 Surplus lines brokers making an offer of coverage under this 1015

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 36 of 58 CODING: Words stricken are deletions; words underlined are additions. sub-subparagraph are not required to comply with s. 1016 626.916(1)(a), (b), (c), or (e). 1017 (IV) Within 10 days after the date of assumption, the 1018 surplus lines insurer assuming policies from the corporation 1019 shall remit to the Bureau of Collateral Management within the 1020 Department of Financial Services a special deposit equal to the 1021 unearned premium net of unearned commissions on the assumed 1022 block of business.

The surplus lines insurer shall submit to the 1023 office, along with the special deposit, an accounting of the 1024 policies assumed and the amount of unearned premium for such 1025 policies and a sworn affidavit attesting to the accuracy of the 1026 accounting by an officer of the surplus lines insurer. 1027 Thereafter, the surplus lines insurer shall make a filing within 1028 10 days after the end of each calendar quarter attesting to the 1029 unearned premium in force for the previous quarter on policies 1030 assumed from the corporation and shall submit additional funds 1031 with that filing if the special deposit is insufficient to cover 1032 the unearned premium on assumed policies, or shall receive a 1033 return of funds within 60 days if the special deposit exceeds 1034 the amount of unearned premium required for assumed policies. 1035 The special deposit is an asset of the surplus lines insurer 1036 which is held by the department for the benefit of state 1037 policyholders of the surplus lines insurer in the event of the 1038 insolvency of the surplus lines insurer.

If an order of 1039 liquidation is entered in any state against the surplus lines 1040 insurer, the department may use the special deposit for payment 1041 of unearned premium or policy claims, return all or part of the 1042 deposit to the domiciliary receiver, or use the funds in 1043 accordance with any action authorized under

part I of

chapter 1044

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 37 of 58 CODING: Words stricken are deletions; words underlined are additions. 631 or in compliance with any order of a court having 1045 jurisdiction over the insolvency. 1046 (

V) In advance of a surplus lines insurer assuming a 1047 policy, surplus lines brokers representing a surplus lines 1048 insurer on a take-out program shall obtain confirmation, in 1049 written or e-mail form, from each producing agent stating that 1050 the agent is willing to participate in the take -out program with 1051 the surplus lines insurer engaging in the take-out program. The 1052 take-out program is also subject to s. 627.3517. If a 1053 policyholder is selected for removal from the corporation by a 1054 surplus lines insurer and an authorized insurer, the corporation 1055 must give priority to the offer of coverage from the authorized 1056 insurer. 1057 (VI)(

A) A risk that has a dwelling replacement cost of 1058 $700,000 or more or a single condominium unit that has a 1059 combined dwelling and contents replacement cost of $700,000 or 1060 more is not eligible for coverage by the corporation if it is 1061 offered comparable coverage from a qualified surplus lines 1062 insurer at a premium no greater than 20 percent above the 1063 premium charged by the corporation. 1064 (

B) A risk that has a dwelling replacement cost below 1065 $700,000 or a single condominium unit that has a combined 1066 dwelling and contents replacement cost below $700,000 remains 1067 eligible for coverage by the corporation if it is offered 1068 coverage from a qualified surplus lines insurer . 1069 4. The plan shall provide for the deferment, in whole or in 1070 part, of the assessment of an assessable insurer, other than an 1071 emergency assessment collected from policyholders pursuant to 1072 sub-subparagraph (b)3.d., if the office finds that payment of 1073

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 38 of 58 CODING: Words stricken are deletions; words underlined are additions. the assessment would endanger or impair the solvency of the 1074 insurer. In the event an assessment against an assessa ble 1075 insurer is deferred in whole or in part, the amount by which 1076 such assessment is deferred may be assessed against the other 1077 assessable insurers in a manner consistent with the basis for 1078 assessments set forth in paragraph (b). 1079 5.

Effective July 1, 2007, in order to evaluate the costs 1080 and benefits of approved take-out plans, if the corporation pays 1081 a bonus or other payment to an insurer for an approved take -out 1082 plan, it shall maintain a record of the address or such other 1083 identifying information on the property or risk removed in order 1084 to track if and when the property or risk is later insured by 1085 the corporation. 1086 6.

Any policy taken out, assumed, or removed from the 1087 corporation is, as of the effective date of the take -out, 1088 assumption, or removal, direct insurance issued by the insurer 1089 and not by the corporation, even if the corporation continues to 1090 service the policies. This subparagraph applies to policies of 1091 the corporation and not policies taken out, assumed, or removed 1092 from any other entity. 1093 7.

For a policy taken out, assumed, or removed from the 1094 corporation, the insurer may, for a period of no more than 3 1095 years, continue to use any of the corporation’s policy forms or 1096 endorsements that apply to the policy taken out, removed, or 1097 assumed without obtaining approval from the office for use of 1098 such policy form or endorsement. 1099 (x)1. The following records of the corporation are 1100 confidential and exempt from the provisions of s. 119.07(1) and 1101 s. 24(a), Art. I of the State Constitution: 1102

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 39 of 58 CODING: Words stricken are deletions; words underlined are additions. a. Underwriting files, except that a policyholder or an 1103 applicant shall have access to his or her own underwriting 1104 files. Confidential and exempt underwriting file records may 1105 also be released to other governmental agencies upon written 1106 request and demonstration of need; such records held by the 1107 receiving agency remain confidential and exempt as provided 1108 herein. 1109 b.

Claims files, until termination of all litigation and 1110 settlement of all claims arising out of the same incident, 1111 although portions of the claims files may remain exemp t, as 1112 otherwise provided by law. Confidential and exempt claims file 1113 records may be released to other governmental agencies upon 1114 written request and demonstration of need; such records held by 1115 the receiving agency remain confidential and exempt as provided 1116 herein. 1117 c.

Records obtained or generated by an internal auditor 1118 pursuant to a routine audit, until the audit is completed, or if 1119 the audit is conducted as part of an investigation, until the 1120 investigation is closed or ceases to be active. An investigation 1121 is considered “active” while the investigation is being 1122 conducted with a reasonable, good faith belief that it could 1123 lead to the filing of administrative, civil, or criminal 1124 proceedings. 1125 d. Matters reasonably encompassed in privileged attorney -1126 client communications. 1127 e.

Proprietary information licensed to the corporation 1128 under contract and the contract provides for the confidentiality 1129 of such proprietary information. 1130 f. All information relating to the medical condition or 1131

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 40 of 58 CODING: Words stricken are deletions; words underlined are additions. medical status of a corporation employee which is not relevant 1132 to the employee’s capacity to perform his or her duties, except 1133 as otherwise provided in this paragraph. Information that is 1134 exempt includes shall include, but is not limited to, 1135 information relating to workers’ compensation, in surance 1136 benefits, and retirement or disability benefits. 1137 g.

Upon an employee’s entrance into the employee assistance 1138 program, a program to assist any employee who has a behavioral 1139 or medical disorder, substance abuse problem, or emotional 1140 difficulty that affects the employee’s job performance, all 1141 records relative to that participation are shall be confidential 1142 and exempt from the provisions of s. 119.07(1) and s. 24(a), 1143 Art. I of the State Constitution, except as otherwise provided 1144 in s. 112.0455(11). 1145 h.

Information relating to negotiations for financing, 1146 reinsurance, depopulation, or contractual services, until the 1147 conclusion of the negotiations. 1148 i. Minutes of closed meetings regarding underwriting files, 1149 and minutes of closed meetings regarding an open cl aims file 1150 until termination of all litigation and settlement of all claims 1151 with regard to that claim, except that information otherwise 1152 confidential or exempt by law must shall be redacted. 1153 2.

If an authorized insurer, a reinsurance intermediary, an 1154 eligible surplus lines insurer, or an entity that has filed an 1155 application with the office for licensure as a property and 1156 casualty insurer in this state is considering writing or 1157 assisting in the underwriting of a risk insured by the 1158 corporation, relevant information from both the underwriting 1159 files and confidential claims files may be released to the 1160

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 41 of 58 CODING: Words stricken are deletions; words underlined are additions. insurer, reinsurance intermediary, eligible surplus lines 1161 insurer, or entity that has been created to seek authority to 1162 write property insurance in this state, provided that the 1163 recipient insurer agrees in writing, notarized and under oath, 1164 to maintain the confidentiality of such files.

If a policy file 1165 is transferred to an insurer, that policy file is no longer a 1166 public record because it is not held by an agency subject to the 1167 provisions of the public records law.

Underwriting files and 1168 confidential claims files may also be released to staff and the 1169 board of governors of the market assistance plan established 1170 pursuant to s. 627.3515, who must retain the confidentiality of 1171 such files, except such files may be released to authorized 1172 insurers that are considering assuming the risks to which the 1173 files apply, provided the insurer agrees in writing, n otarized 1174 and under oath, to maintain the confidentiality of such files. 1175 Finally, the corporation or the board or staff of the market 1176 assistance plan may make the following information obtained from 1177 underwriting files and confidential claims files available to an 1178 entity that has obtained a permit to become an authorized 1179 insurer, a reinsurer that may provide reinsurance under s. 1180 624.610, a licensed reinsurance broker, a licensed rating 1181 organization, a modeling company, or a licensed general lines 1182 insurance agent: name, address, and telephone number of the 1183 residential property owner or insured; location of the risk; 1184 rating information; loss history; and policy type.

The receiving 1185 person must retain the confidentiality of the information 1186 received and may use the information only for the purposes of 1187 developing a take-out plan or a rating plan to be submitted to 1188 the office for approval or otherwise analyzing the underwriting 1189

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 42 of 58 CODING: Words stricken are deletions; words underlined are additions. of a risk or risks insured by the corporation on behalf of the 1190 private insurance market. A licensed general lines insurance 1191 agent may not use such information for the direct solicitation 1192 of policyholders. 1193 3.

A policyholder who has filed suit against the 1194 corporation has the right to discover the contents of his or her 1195 own claims file to the same extent that discovery of such 1196 contents would be available from a private insurer in litigation 1197 as provided by the Florida Rules of Civil Procedure, the Florida 1198 Evidence Code, and other applicable law.

Pursuant to subpoena, a 1199 third party has the right to discover the contents of an 1200 insured’s or applicant’s underwriting or claims file to the same 1201 extent that discovery of such contents would be available from a 1202 private insurer by subpoena as provided by the Florida Rules of 1203 Civil Procedure, the Florida Evidence Code, and other applicable 1204 law, and subject to any confidentiality protections requested by 1205 the corporation and agreed to by the seeking party or ordered by 1206 the court.

The corporation may release confidential underwriting 1207 and claims file contents and information as it deems necessary 1208 and appropriate to underwrite or service insurance policies and 1209 claims, subject to any confidentiality protections deemed 1210 necessary and appropriate by the corporation. 1211 4. Portions of meetings of the corporation are exempt fro m 1212 the provisions of s. 286.011 and s. 24(b), Art. I of the State 1213 Constitution wherein confidential underwriting files or 1214 confidential open claims files are discussed.

All portions of 1215 corporation meetings which are closed to the public shall be 1216 recorded by a court reporter. The court reporter shall record 1217 the times of commencement and termination of the meeting, all 1218

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 43 of 58 CODING: Words stricken are deletions; words underlined are additions. discussion and proceedings, the names of all persons present at 1219 any time, and the names of all persons speaking. No portion of 1220 any closed meeting shall be off the record. Subject to the 1221 provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s 1222 notes of any closed meeting shall be retained by the corporation 1223 for a minimum of 5 years.

A copy of the transcript, less any 1224 exempt matters, of any closed meeting wherein claims are 1225 discussed shall become public as to individual claims after 1226 settlement of the claim. 1227 (ii) The corporation shall revise the programs adopted 1228 pursuant to sub-subparagraph (q)3.a. for personal lines 1229 residential policies to maximize policyholder options and 1230 encourage increased participation by insurers and agents. After 1231 January 1, 2017, a policy may not be taken out of the 1232 corporation unless the provisions of this paragraph are met. 1233 1. The corporation must publish a periodic

schedule of 1234 cycles during which an insurer may identify, and notify the 1235 corporation of, policies that the insurer is requesting to take 1236 out. A request must include a description of the coverage 1237 offered and an estimated premium and must be submitted to the 1238 corporation in a form and manner prescribed by the corporation. 1239 2. The corporation must maintain and make available to the 1240 agent of record a consolidated list of all insurers requesting 1241 to take out a policy.

The list must include a description of the 1242 coverage offered and the estimated premium for each take -out 1243 request. 1244 3. The corporation must provide written notice to the 1245 policyholder and the agent of record regarding all insurers 1246 requesting to take out the policy, which notice must inform that 1247

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 44 of 58 CODING: Words stricken are deletions; words underlined are additions. a take-out offer that is not more than 20 percent greater than 1248 the corporation’s premium renders the risk ineligible for 1249 coverage from and regarding the policyholder’s option to accept 1250 a take-out offer or to reject all take-out offers and to remain 1251 with the corporation. The notice must be in a format prescribed 1252 by the corporation and include, for each take-out offer: 1253 a. The amount of the estimated premium; 1254 b.

A description of the coverage; and 1255 c. A comparison of the estimated premium and coverage 1256 offered by the insurer to the estimated premium and coverage 1257 provided by the corporation. 1258

Section

Section 627.3518, Florida Statutes, is amended 1259 to read: 1260 627.3518 Citizens Property Insurance Corporation 1261 policyholder eligibility clearinghouse program. —The purpose of 1262 this

section is to provide a framework for the corporation to 1263 implement a clearinghouse program by January 1, 2014. 1264

(1) As used in this section, the term: 1265 (a) “Corporation” means Citizens Property Insurance 1266 Corporation. 1267 (b) “Exclusive agent” means any licensed insurance agent 1268 that has, by contract, agreed to act exclusively for one company 1269 or group of affiliated insurance companies and is disallowed by 1270 the provisions of that contract to directly write for any other 1271 unaffiliated insurer absent express consent from the company or 1272 group of affiliated insurance companies. 1273 (c) “Independent agent” means any licensed insurance agent 1274 not described in paragraph (b). 1275 (d) “Program” means the clearinghouse created under this 1276

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 45 of 58 CODING: Words stricken are deletions; words underlined are additions. section. 1277

(2) In order to confirm eligibility with the corporation 1278 and to enhance access of new applicants for coverage and 1279 existing policyholders of the corporation to offers of coverage 1280 from authorized insurers, the corporation shall establish a 1281 program for personal residential risks in order to facilitate 1282 the diversion of ineligible applicants and existing 1283 policyholders from the corporation into the voluntary insurance 1284 market.

The corporation shall also develop appropriate 1285 procedures for facilitating the diversion of ineligible 1286 applicants and existing policyholders for commercial residential 1287 coverage into the private insurance market and shall report such 1288 procedures to the President of the Senate and the Speaker of the 1289 House of Representatives by January 1, 2014. 1290

(3) The corporation board shall establish the clearinghouse 1291 program as an organizational unit within the corporation. The 1292 program shall have all the rights and responsibilities in 1293 carrying out its duties as a licensed general lines agent, but 1294 may not be required to employ or engage a licensed general l ines 1295 agent or to maintain an insurance agency license to carry out 1296 its activities in the solicitation and placement of insurance 1297 coverage. In establishing the program, the corporation may: 1298 (

a) Require all new applications, and all policies due for 1299 renewal, to be submitted for coverage to the program in order to 1300 facilitate obtaining an offer of coverage from an authorized 1301 insurer before binding or renewing coverage by the corporation. 1302 (

b) Employ or otherwise contract with individuals or other 1303 entities for appropriate administrative or professional services 1304 to effectuate the plan within the corporation in accordance with 1305

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 46 of 58 CODING: Words stricken are deletions; words underlined are additions. the applicable purchasing requirements under s. 627.351. 1306 (

c) Enter into contracts with any authorized insurer to 1307 participate in the program and accept an appointment by such 1308 insurer. 1309 (

d) Provide funds to operate the program. Insurers and 1310 agents participating in the program are not required to pay a 1311 fee to offset or partially offset the cost of the program or use 1312 the program for renewal of policies initially written through 1313 the clearinghouse. 1314 (

e) Develop an enhanced application that includes 1315 information to assist private insurers in determining whether to 1316 make an offer of coverage through the program. 1317 (

f) For personal lines residential risks, require, before 1318 approving all new applications for coverage by the corporation, 1319 that every application be subject to a period of 2 business days 1320 when any insurer participating in the program may select the 1321 application for coverage. The insurer may issue a bin der on any 1322 policy selected for coverage for a period of at least 30 days 1323 but not more than 60 days. 1324

(4) Any authorized insurer may participate in the program; 1325 however, participation is not mandatory for any insurer. 1326 Insurers making offers of coverage to new applicants or renewal 1327 policyholders through the program: 1328 (

a) May not be required to individually appoint any agent 1329 whose customer is underwritten and bound through the program. 1330 Notwithstanding s. 626.112, insurers are not required to appoint 1331 any agent on a policy underwritten through the program for as 1332 long as that policy remains with the insurer. Insurers may, at 1333 their election, appoint any agent whose customer is initially 1334

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 47 of 58 CODING: Words stricken are deletions; words underlined are additions. underwritten and bound through the program. In the event an 1335 insurer accepts a policy from an agent who is not appointed 1336 pursuant to this paragraph, and thereafter elects to accept a 1337 policy from such agent, the provisions of s. 626.112 requiring 1338 appointment apply to the agent. 1339 (

b) Must enter into a limited agency agreement with each 1340 agent that is not appointed in accordance with paragraph (

a) and 1341 whose customer is underwritten and bound through the program. 1342 (

c) Must enter into its standard agency agreement with each 1343 agent whose customer is underwritten and bound through the 1344 program when that agent has been appointed by the insurer 1345 pursuant to s. 626.112. 1346 (

d) Must comply with s. 627.4133(2). 1347 (

e) May participate through their single-designated 1348 managing general agent or broker; however, the provisions of 1349 paragraph (6)(

a) regarding ownership, control, and use of the 1350 expirations continue to apply. 1351 (

f) Must pay to the producing agent a commission equal to 1352 that paid by the corporation or the usual and customary 1353 commission paid by the insurer for that line of business, 1354 whichever is greater. 1355

(5) Notwithstanding s. 627.3517, any applicant for new 1356 coverage from the corporation is not eligible for coverage from 1357 the corporation if provided an offer of coverage from an 1358 authorized insurer through the program at a premium that is at 1359 or below the eligibility threshold established in s. 1360 627.351(6)(c)5.a. Whenever an offer of coverage for a personal 1361 lines risk is received for a policyholder of the corporation at 1362 renewal from an authorized insurer through the program, if the 1363

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 48 of 58 CODING: Words stricken are deletions; words underlined are additions. offer is at or below the eligibility threshold established in s. 1364 627.351(6)(c)5.a. equal to or less than the corporation’s 1365 renewal premium for comparable coverage, the risk is not 1366 eligible for coverage with the corporation.

In the event an 1367 offer of coverage for a new applicant is received fr om an 1368 authorized insurer through the program, and the premium offered 1369 exceeds the eligibility threshold contained in s. 1370 627.351(6)(c)5.a., the applicant or insured may elect to accept 1371 such coverage, or may elect to accept or continue coverage with 1372 the corporation.

In the event an offer of coverage for a 1373 personal lines risk is received from an authorized insurer at 1374 renewal through the program, and the premium offered is at or 1375 below the eligibility threshold established in s. 1376 627.351(6)(c)5.a. more than the corporation’s renewal premium 1377 for comparable coverage, the insured is not eligible to may 1378 elect to accept such coverage, or may elect to accept or 1379 continue coverage with the corporation.

Section 1380 627.351(6)(c)5.a.(

I) does not apply to an offer of coverage fr om 1381 an authorized insurer obtained through the program. An applicant 1382 for coverage from the corporation who was declared ineligible 1383 for coverage at renewal by the corporation in the previous 36 1384 months due to an offer of coverage pursuant to this subsection 1385 shall be considered a renewal under this

section if the 1386 corporation determines that the authorized insurer making the 1387 offer of coverage pursuant to this subsection continues to 1388 insure the applicant and increased the rate on the policy in 1389 excess of the increase allowed for the corporation under s. 1390 627.351(6)(n)5. 1391

(6) Independent insurance agents submitting new 1392

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 49 of 58 CODING: Words stricken are deletions; words underlined are additions. applications for coverage or that are the agent of record on a 1393 renewal policy submitted to the program: 1394 (

a) Are granted and must maintain ownership and the 1395 exclusive use of expirations, records, or other written or 1396 electronic information directly related to such applications or 1397 renewals written through the corporation or through an insurer 1398 participating in the program, notwithstanding s. 1399 627.351(6)(c)5.a.(I)(

B) and (II)(B). Such ownership is granted 1400 for as long as the insured remains with the agency or until sold 1401 or surrendered in writing by the agent. Contracts with the 1402 corporation or required by the corporation must not amend, 1403 modify, interfere with, or limit such rights of ownership. Such 1404 expirations, records, or other written or electronic information 1405 may be used to review an application, issue a policy, or for any 1406 other purpose necessary for placing such business through the 1407 program. 1408 (

b) May not be required to be appointed by any insurer 1409 participating in the program for policies written solely through 1410 the program, notwithstanding the provisions of s. 626.112. 1411 (

c) May accept an appointment from any insurer 1412 participating in the program. 1413 (

d) May enter into either a standard or limited agency 1414 agreement with the insurer, at the insurer’s option. 1415 1416 Applicants ineligible for coverage in accordance with subsection 1417 (5) remain ineligible if their independent agent is unwilling or 1418 unable to enter into a standard or limited agency agreement with 1419 an insurer participating in the program. 1420

(7) Exclusive agents submitting new applications for 1421

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 50 of 58 CODING: Words stricken are deletions; words underlined are additions. coverage or that are the agent of record on a renewal policy 1422 submitted to the program: 1423 (

a) Must maintain ownership and the exclusive use of 1424 expirations, records, or other written or electronic information 1425 directly related to such applications or renewals written 1426 through the corporation or through an insurer participating in 1427 the program, notwithstanding s. 627.351(6)(c)5.a.(I)(

B) and 1428 (II)(B). Contracts with the corporation or required by the 1429 corporation must not amend, modify, interfere with, or limit 1430 such rights of ownership. Such expirations, records, or other 1431 written or electronic information may be used to review an 1432 application, issue a policy, or for any other purpose necessary 1433 for placing such business through the program. 1434 (

b) May not be required to be appointed by any insurer 1435 participating in the program for policies written solely through 1436 the program, notwithstanding the provisions of s. 626.112. 1437 (

c) Must only facilitate the placement of an offer of 1438 coverage from an insurer whose limited servicing agreement is 1439 approved by that exclusive agent’s exclusive insurer. 1440 (

d) May enter into a limited servicing agreement with the 1441 insurer making an offer of coverage, and only after the 1442 exclusive agent’s insurer has approved the limited servicing 1443 agreement terms. The exclusive agent’s insurer must approve a 1444 limited service agreement for the program for any insurer for 1445 which it has approved a service agreement for other purposes. 1446 1447 Applicants ineligible for coverage in accordance with subsection 1448 (5) remain ineligible if their exclusive agent is unwilling or 1449 unable to enter into a standard or limited agency agreement with 1450

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 51 of 58 CODING: Words stricken are deletions; words underlined are additions. an insurer making an offer of coverage to that applicant. 1451

(8) Submission of an application for coverage by the 1452 corporation to the program does not constitute the binding of 1453 coverage by the corporation, and failure of the program to 1454 obtain an offer of coverage by an insurer may not be considered 1455 acceptance of coverage of the risk by the corporation. 1456

(9) The 45-day notice of nonrenewal requirement set forth 1457 in s. 627.4133(2)(b)5. applies when a policy is nonrenewed by 1458 the corporation because the risk has received an offer of 1459 coverage pursuant to this

section which renders the risk 1460 ineligible for coverage by the corporation. 1461

(10) The program may not include commercial nonresidential 1462 policies. 1463

(11) Proprietary business information provided to the 1464 corporation’s clearinghouse by insurers with respect to 1465 identifying and selecting risks for an offer of coverage is 1466 confidential and exempt from s. 119.07(1) and s. 24(a), Art. I 1467 of the State Constitution. 1468 (

a) As used in this subsection, the term “proprietary 1469 business information” means information, regardless of form or 1470 characteristics, which is owned or controlled by an insurer and: 1471 1.

Is identified by the insurer as proprietary business 1472 information and is intended to be and is treated by the insurer 1473 as private in that the disclosure of the information would cause 1474 harm to the insurer, an individual, or the company’s business 1475 operations and has not been disclosed unless disclosed pursuant 1476 to a statutory requirement, an order of a court or 1477 administrative body, or a private agreement that provides that 1478 the information will not be released to the public; 1479

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 52 of 58 CODING: Words stricken are deletions; words underlined are additions. 2. Is not otherwise readily ascertainable or publicly 1480 available by proper means by other persons from another source 1481 in the same configuration as provided to the clearinghouse; and 1482 3. Includes: 1483 a. Trade secrets, as defined in s. 688.002. 1484 b.

Information relating to competitive interests, the 1485 disclosure of which would impair the competitive business of the 1486 provider of the information. 1487 1488 Proprietary business information may be found in underwriting 1489 criteria or instructions which are used to identify and select 1490 risks through the program for an offer of coverage and are 1491 shared with the clearinghouse to facilitate the shopping of 1492 risks with the insurer. 1493 (

b) The clearinghouse may disclose confidential and exem pt 1494 proprietary business information: 1495 1. If the insurer to which it pertains gives prior written 1496 consent; 1497 2. Pursuant to a court order; or 1498 3. To another state agency in this or another state or to a 1499 federal agency if the recipient agrees in writing to maint ain 1500 the confidential and exempt status of the document, material, or 1501 other information and has verified in writing its legal 1502 authority to maintain such confidentiality. 1503

Section 4. Paragraphs (f), (g), and (

h) are added to 1504 subsection (5) of

section 627.7011, Florida Statutes, to read: 1505 627.7011 Homeowners’ policies; offer of replacement cost 1506 coverage and law and ordinance coverage.— 1507

(5) This

section does not: 1508

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 53 of 58 CODING: Words stricken are deletions; words underlined are additions. (f)1. Prohibit an insurer, notwithstanding paragraph 1509 (1)(a), from providing limited coverage on a personal lines 1510 residential property insurance policy by including a roof 1511 surface type reimbursement schedule. If included in the policy, 1512 a roof surface type reimbursement

schedule must do all of the 1513 following: 1514 a. Provide reimbursement for repair, replacement, and 1515 installation based on the annual age of a roof surface type. 1516 b. Provide full replacement coverage for: 1517 (

I) Any roof surface type less than 10 years old; 1518 (II) A total loss to a primary structure in accordance with 1519 the valued policy law under s. 627.702 which is caused by a 1520 covered peril; and 1521 (III) A loss to the roof caused by a storm declared to be a 1522 hurricane by the National Hurricane Center. 1523 c. Use annual depreciation amounts that: 1524 (

I) Are actuarially justified and meet the requirements of 1525 s. 627.062; and 1526 (II) Do not exceed 4 percent unless actuarially justified. 1527 d. Be approved by the office. 1528 e. Include at the top of the roof surface type schedule, in 1529 bold type no smaller than 12 points, the following statement: 1530 1531 “PLEASE DISCUSS WITH YOUR INSURANCE AGENT. YOU ARE 1532 ELECTING TO PURCHASE COVERAGE ON YOUR ROOF ACCORDING 1533 TO A ROOF SURFACE TYPE REIMBURSEMENT SCHEDULE. IF YOUR 1534 ROOF IS DAMAGED BY A COVERED PERIL, YOU WILL RECEIVE A 1535 PAYMENT AMOUNT FOR YOUR ROOF ACCORDING TO THE

SCHEDULE 1536 BELOW. BE ADVISED THAT THIS MAY RESULT IN YOU HAVING 1537

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 54 of 58 CODING: Words stricken are deletions; words underlined are additions. TO PAY SIGNIFICANT COSTS TO REPAIR OR REPLACE YOUR 1538 ROOF. PLEASE DISCUSS WITH YOUR INSURANCE AGENT.” 1539 1540 f. Be provided to the insured with the policy documents at 1541 issuance and renewal. 1542 2. A residential property insurance policy may convert to a 1543 roof surface type reimbursement

schedule at renewal if the roof 1544 is at least 10 years old and the policyholder: 1545 a. Receives a Notice of Change in Policy Terms pursuant to 1546 s. 627.43141; and 1547 b. Accepts the written notice of renewal premium required 1548 under s. 627.4133, by paying the premium. 1549 (

g) Prohibit an insurer, notwithstanding paragraph (1)(a), 1550 from providing coverage on a personal lines residential property 1551 insurance policy that limits coverage for a roof to a stated 1552 value sublimit of coverage. If included in a policy, a stated 1553 value sublimit of coverage must do all of the following: 1554 1. Provide full replacement coverage for: 1555 a. Any roof surface type less than 10 years old; 1556 b. A total loss to a primary structure in accordance with 1557 the valued policy law under s. 627.702 which is caused by a 1558 covered peril; and 1559 c.

A loss to the roof caused by a storm declared to be a 1560 hurricane by the National Hurricane Center. 1561 2. Include in the policy documents at issuance and at 1562 renewal, in bold type no smaller than 12 points, the following 1563 statement: 1564 1565 “PLEASE DISCUSS WITH YOUR INSURANCE AGENT. YOU ARE 1566

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 55 of 58 CODING: Words stricken are deletions; words underlined are additions. ELECTING TO PURCHASE A STATED VALUE SUBLIMIT OF 1567 COVERAGE ON YOUR ROOF. BE ADVISED THAT THIS MAY RESULT 1568 IN YOU HAVING TO PAY SIGNIFICANT COSTS TO REPAIR OR 1569 REPLACE YOUR ROOF. PLEASE DISCUSS WITH YOUR INSURANCE 1570 AGENT.” 1571 1572 (

h) Prohibit an insurer that provides roof reimbursement on 1573 the basis of a roof surface type reimbursement

schedule or that 1574 limits coverage for a roof to a stated value subli mit of 1575 coverage from also offering roof reimbursement on the basis of 1576 replacement costs. 1577

Section 5. For the purpose of incorporating the amendments 1578 made by this act to

section 627.351, Florida Statutes, in a 1579 reference thereto, subsection (10) of

section 624.424, Florida 1580 Statutes, is reenacted to read: 1581 624.424 Annual statement and other information.— 1582

(10) Each insurer or insurer group doing business in this 1583 state shall file on a quarterly basis in conjunction with 1584 financial reports required by paragraph (1)(

a) a supplemental 1585 report on an individual and group basis on a form prescribed by 1586 the commission with information on personal lines and commercial 1587 lines residential property insurance policies in this state. The 1588 supplemental report shall include separate information for 1589 personal lines property policies and for commercial lines 1590 property policies and totals for each item specified, including 1591 premiums written for each of the property lines of business as 1592 described in ss. 215.555(2)(

c) and 627.351(6)(a). The report 1593 shall include the following information for each county on a 1594 monthly basis: 1595

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 56 of 58 CODING: Words stricken are deletions; words underlined are additions. (

a) Total number of policies in force at the end of each 1596 month. 1597 (

b) Total number of policies canceled. 1598 (

c) Total number of policies nonrenewed. 1599 (

d) Number of policies canceled due to hurricane risk. 1600 (

e) Number of policies nonrenewed due to hurricane risk. 1601 (

f) Number of new policies written. 1602 (

g) Total dollar value of structure exposure under policies 1603 that include wind coverage. 1604 (

h) Number of policies that exclude wind coverage. 1605

Section 6. For the purpose of incorporating the amendments 1606 made by this act to

section 627.351, Florida Statutes, in a 1607 reference thereto,

section 627.3517, Florida Statutes, is 1608 reenacted to read: 1609 627.3517 Consumer choice.—No provision of s. 627.351, s. 1610 627.3511, or s. 627.3515 shall be construed to impair the right 1611 of any insurance risk apportionment plan policyholder, upon 1612 receipt of any keepout or take-out offer, to retain his or her 1613 current agent, so long as that agent is duly licensed and 1614 appointed by the insurance risk apportionment plan or otherwise 1615 authorized to place business with the insurance risk 1616 apportionment plan.

This right shall not be canceled, suspended, 1617 impeded, abridged, or otherwise compromised by any rule, plan of 1618 operation, or depopulation plan, whether through keepout, take -1619 out, midterm assumption, or any other means, of any insurance 1620 risk apportionment plan or depopulation plan, including, but not 1621 limited to, those described in s. 627.351, s. 627.3511, or s. 1622 627.3515. The commission shall adopt any rules necessary to 1623 cause any insurance risk apportionment plan or market assistance 1624

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 57 of 58 CODING: Words stricken are deletions; words underlined are additions. plan under such sections to demonstrate that the operations of 1625 the plan do not interfere with, promote, or allow interference 1626 with the rights created under this section.

If the 1627 policyholder’s current agent is unable or unwilling to be 1628 appointed with the insurer making the take-out or keepout offer, 1629 the policyholder shall not be disqualified from participation in 1630 the appropriate insurance risk apportionment plan because of an 1631 offer of coverage in the voluntary market. An offer of full 1632 property insurance coverage by the insurer currently insuring 1633 either the ex-wind or wind-only coverage on the policy to which 1634 the offer applies shall not be considered a take-out or keepout 1635 offer.

Any rule, plan of operation, or plan of depopulation, 1636 through keepout, take-out, midterm assumption, or any other 1637 means, of any property insurance risk apportionment plan under 1638 s. 627.351(2) or (6) is subject to ss. 627.351(2)(

b) and (6)(c) 1639 and 627.3511(4). 1640

Section 7. For the purpose of incorporating the amendments 1641 made by this act to

section 627.351, Florida Statutes, in a 1642 reference thereto, subsection (1) of

section 627.712, Florida 1643 Statutes, is reenacted to read: 1644 627.712 Residential windstorm coverage required; 1645 availability of exclusions for windstorm or contents. — 1646

(1) An insurer issuing a residential property insurance 1647 policy must provide windstorm coverage. Except as provided in 1648 paragraph (2)(c), this

section does not apply to risks that are 1649 eligible for wind-only coverage from Citizens Property Insurance 1650 Corporation under s. 627.351(6), and risks that are not eligible 1651 for coverage from Citizens Property Insurance Corporation under 1652 s. 627.351(6)(a)3. or 5. A risk ineligible for coverage by the 1653

Florida Senate - 2022 SB 1728 21-01768A-22 20221728__ Page 58 of 58 CODING: Words stricken are deletions; words underlined are additions. corporation under s. 627.351(6)(a)3. or 5. is exempt from this 1654

section only if the risk is located within the boundaries of the 1655 coastal account of the corporation. 1656

Section 8. This act shall take effect July 1, 2022. 1657