15-004811RX Florida Property And Casualty Association, Inc. vs. Florida Hurricane Catastrophe Fund And State Board Of Administration Status: Closed DOAH Final Order on Friday, October 9, 2015.

Summary: Rule/form requiring insurers covered by Fla. Hurricane Cat Fund to report street addresses of covered property is invalid for exceeding grant of rulemaking authority and enlarging, modifying or contravening law implemented.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA PROPERTY AND CASUALTY

ASSOCIATION, INC.,

Petitioner,

and

FIRST PROTECTIVE INSURANCE

COMPANY d/b/a FRONTLINE

INSURANCE,

Intervenor,

vs. Case No. 15 - 4811RX

FLORIDA HURRICANE CATASTROPHE

FUND AND STATE BOARD OF

ADMINISTRATION,

Respondents.

_______________________________/

FINAL ORDER

On September 2 5 , 2015 , Robert E. Meale, Administrative Law

Judge of the Division of Administrative Hearings (DOAH),

conducted the final hearing in Tallahassee, Florida.

APPEARANCES

For Petitioner and Intervenor :

Nate Wesl ey ( " Wes " ) Strickland, Esquire

Colodny Fass, P.A.

215 South Monroe Street, Suite 701

Tallahassee, Florida 32301

For Respondent s : Wayne E. Flowers , Esquire

Lewis, Longman & Walker, P.A.

245 Riverside Avenue, Suite 150

Jacksonville, Florida 32202 - 4931

Ann e Longman, Esquire

Lewis, Longman & Walker, P.A.

315 South Calhoun Street, Suite 830

Tallahassee, Florida 32301 - 1872

STATEMENT OF THE ISSUE S

Pursuant to section 120.56(1)(a), t he issue s are whether

Petitioner and Intervenor are substantially affected by rules

requiring that covered insurers report their policyholders '

street addresses o n Form FHCF - D1A Rev. 05/15 (2015 Data Call) , as

incorporated by reference in Florida Administrative Code

Rule 19 - 8.029(4)(e), and, if so, whether the se rules are an

invalid exercise of delegated legislative authority .

PRELIMINARY STATEMENT

On August 27, 2015, Petitioner filed a Petition to Determine

the Partial Invalidity of a Rule (Petition ). The Petition

challenges the portions of 2015 Data Call that require insurers

to provide the street number and secondary address, such as an

apartment number, for each covered property. The specific

provisions of the 2015 Data Call challenged by Petitioner are:

1) the first paragraph 2 on page 2, which identifies this

requirement as an important cha nge from the 2014 data call;

2) under " file layout " on page s 7 and 8 , fields 13 and 14, which

elicit the street number and secondary address of each covered

property; and 3) paragraphs 13 and 14 on page 14, which set forth

fields 13 and 14 requiring , respectively, the street number and

secondary ad dress of each covered property . For convenience,

the se portions of the form will be referred to a s f ields 13

and 14 or, cumulatively, the street address data , and these rules

will be referred to as the street address rules .

Petitioner alleges that it is a n industry trade group that

was organized in 1997 to promote a healthy, competitive insurance

market in the state of Florida. The Petition alleges that

Petitioner ' s Homeowners Division consists of 17 domestic members

that account for 40% of the homeowners insurance written in

Florida. The Petition alleges that Petitioner is substantially

affected by the 2015 Data Call because its members are

substantially affected by the 2015 Data Call, which is within

Petitioner ' s general scope of interest and activity, and the

invalidation of the challenged portions of the 2015 Data Call is

a type of relief that is appropriate for Petitioner to pursue on

behalf of its members. Th e Petition also alleges that Petitioner

is substantially affected because a failure by any of its members

to provide the street address information demanded by fields 13

and 14 constitutes a violation of the Florida Insurance Code, as

described below.

The Petition explains that, pursuant to section 215.555,

Florida Statutes, insurers writing policies covering residential

property in Florida are required annually to purchase

reimbursement contracts from Respondent Florida Hurricane

Catastrophe Fund (FHCF ). The Petition states that, in each

reimbursement contract , FHCF promises to reimburse the insurer

for a certain percentage of its hurricane losses in return for

which t he insurer pays FHCF a premium based on the actuarial

calculations of an independent consultant.

The Petition alleges that the reimbursement premium is

based on each $1000 of insured value under covered policies

by zip code. Accordingly, the Petition alleges that

section 215.555(5)(c) provides that, by September 1 of each

ye ar, each insurer must notify Respondent State Board of

Administration (SBA) of " its insured values under covered

policies by zip code, as of June 30 of that year. "

The Petition alleges that SBA annually prepares a data

call instructing insurers how to prep are and submit their annual

report of insured values under covered policies by zip code. The

2015 Data Call is allegedly the data call f or the reimbursement

co ntract year ending May 31, 2016 . For the first time, the 2015

Data Call allegedly requires an i nsurer to report insured values

under covered policies by street ad dresses, not merely zip codes .

The Petition alleges that Petitioner ' s members consider the

street addresses of their policyholders to be confidential and

proprietary information. P ursuant to rule 19 - 8.030(9), a failure

to comply with the requirements of the 2015 Data Call constitutes

a violation of the Florida Insurance Code, and FHCF is authorized

to report any violation of the Florida Insurance Code to the

Office of Insurance Regu lation (OIR) for " whatever action that it

deems appropriate . "

The Petition alleges that the street address rules exceed

the powers, functions, and duties that the L egislature dele gated

to SBA in section 215.555; SBA has exceeded it s grant of

rulemaking authority; the street address rules enlarge, modify,

and contravene the specific provisions of the law implemented;

the street address rules are vague, fail to establish adequate

standards for SBA ' s decision - making, and vest unbridled

discretion in FHCF; a nd the street address rules are arbitrary

and capricious because they are not supported by logic or the

necessary facts and were adopted without reason.

On September 25, 2015, First Protective Insurance Company,

doing business as Frontline Insurance (Inter venor), filed a

Motion to Intervene , which challenges the street address rules on

the grounds set forth in the Petition . The motion alleges that

Intervenor is a member of Petitioner and a Florida domestic

insurer transacting property and casualty insuranc e business in

Florida, including residential property insurance business. Due

to its insurance business activities, Intervenor allegedly is

required to participate in the FHCF for the year ending May 31,

2016.

The motion notes that the 2015 Data Call wa s due to be filed

on or before September 1, 2015, and that Intervenor timely filed

its 2015 Data C all , but without the information required by

fields 13 and 14. By letter dated September 17, 2015, with a

copy to OIR, FHCF advised Frontline that its omission of street

address data rendered its filing not in compliance with

rule 19 - 8.029, and the 2015 reimbursement contract authorizes

FHCF to withhold reimbursement payments until Intervenor files a

compliant 2015 Data Call .

Respondents objected to the Motion to Intervene. After

hearing argument of counsel at the start of the hearing, the

Administrative Law Judge granted the motion and issued an Order

memorializing this ruling on September 28, 2015.

At the hearing, Petitioner and Intervenor called two

witnesses, and Respondents called one witness. The parties

jointly offered 23 exhibits : Joint Exhibits 1 through 23.

Petitioner offered four exhibits: Petitioner Exhibits 1

through 4. Intervenor offered one exhibit: Intervenor

Exhibit 1. Respondent s offered three exhibits: Respondent

Exhibits 1 through 3. All exhibits were admitted.

Intervenor requested an expedited disposition of this case

due to the ongoing risk that OIR may commence a proceeding to

suspend or revoke its certificate of authority based on

Intervenor ' s failure to f ile a compliant 2015 Data Call .

Accordingly, t he Administrative Law Judge ordered that the

parties file any proposed final orders within seven days of the

date of the filing o f the transcript.

The court reporter filed the transcript on September 28,

2015 . Petitioner and Intervenor filed their proposed final order

on October 5 , 2015 , and Respondents filed their proposed final

order on the next day. The Administrative Law Jud ge has

considered Respondents ' proposed final order as though it had

been timely filed.

FINDING S OF FACT

1. Insured losses from Hurricane Andrew in 1992 revealed

that numerous property and casualty insurers had over - insured

certain exposures . A fter the storm, worldwide insurance capacity

contracted, which eliminated an important means by which insurers

could addres s the problem of over - exposure. These conditions

forced many insurers to reduce their Florida exposure to preserve

their solvency . § 215.555 (1)(b) , Fla. Stat. (2013).

2. Finding that many insurers were unable or unwilling to

maintain the reserves, surplus, and reinsurance sufficient to pay

all claims following catastrophic insured losses,

§ 215.555(1)(d) , Fla. Stat. , the L egislatur e in 1993 created FHCF

to be administered by SBA. The purpose of FHCF is " to provide a

stable and ongoing source of reimbursement to insurers for a

portion of their catastrophic losses . . . . " § 215.555(1)(e) ,

Fla. Stat. The L egislature structured FHCF as " a state trust

fund under the dire ction and control of the [SBA to operate]

exclusively for the purpose of protecting and advancing the

state ' s interest in maintaining insurance capacity in this

state. " § 215.555(1)(f) , Fla. Stat.

3 . To maintain insurance capacity in Florida, each insurer

issuing an insurance policy on residential property in Florida is

required to enter into a reimbursement contract with FHCF.

§ 215.555(2)(c) and (4)(a) , Fla. Stat. In general, the

reimbu rsement contract provides that, in the event of covered

losses, FHCF shall pay a specified reimbursement amount in return

for the payment of an annual premium by the insurer. Id.

4. An insurer ' s covered losses in excess of its non -

reimburs able retention amount will be reimbursed at one of three

percentages -- 45%, 75%, or 90% -- that the insurer selects for the

reimbursement contract year , although reimbursements are subject

to a specified maximum payout on all reimbursement contracts in a

single contract yea r. § 215.555 (2)(e) and (4)(b)1. and (c)1. ,

Fla. Stat. SBA annually retains an independent actuarial

consultant to develop a formula for determining the reimbursement

premium to be paid by each insurer to FHCF. § 215.555(5)(a)

and (b) , Fla. Stat . The formula " shall specify, for each zip

code or other limited geographical area, the amount of premium to

be paid by an insurer for each $1,000 of insured value under

covered policies in that zip code or other area. "

§ 215.555(5)(b) , Fla. Stat . By Sep tember 1 of each year, " each

insurer shall notify [SBA] of its insured values under covered

policies by zip code, as of June 30 of that year. "

§ 215.555(5)(c) , Fla. Stat . SBA then calculates a reimbursement

premium by applying the reported insured values , by zip code, to

the premium formula developed by the actuarial consultant. Id.

5. Reimbursement premiums are a major source of revenue for

FHCF. Other sources of revenue may include investment income,

pursuant to section 215.555(3); emergency assessme nts on all

premiums paid for any property and casualty insurance in Florida,

pursuant to section 215.555(6)(b); interest on certain advances

made to insurers likely to be due reimbursements, pursuant to

section 215.555(4)(e) ; and certain fees that FHCF may impose on

insurer s filing untimely or incorrect exposure data, pursuant

to section 215.555(7)(e) . FHCF may also anticipate revenues

and maintain cash flow by issuing post - loss revenue bonds,

pursuant to section 215.555(6)(a) , and borro wing money by

other means , such as by issuing pre - event bonds , pursuant to

section 215.555(7)(b ) .

6. Allowable expenditures of FHCF are reimbursements to

in surers, debt service, costs of legislatively authorized

hurricane - loss mitigation program s , reinsurance costs ,

and administrative costs. § 215.555(3) , Fla. Stat .

Section 215.555(7)(a) specifically authorizes FHCF to enter

into reinsurance contracts with reinsurers acceptable to OIR

" consistent with the prudent management of the fund. "

7. FHCF p urchases reinsurance to manage its loss exposure

and maintain its ability timely to reimburse Florida insurers for

covered losses. FHCF ' s reinsurance contracts are unique d ue to a

variety of factors, such as the loss amounts retained by

individual insurers, the three tiers of reimbursement rates, and

the limits on total reimbursements in a reimbursement contract

year. FHCF ' s reinsurance contracts thus require customized

pricing, which places a premium on careful negotiations to ensure

that FHCF is purchasing reinsurance contracts at favorable

prices.

8. For a variety of reasons, including the emergence of

pension funds, hedge funds, and wealthy individuals as

reinsurers , reinsurance costs have declined in recent years. For

instance, FHCF was quote d , in 2008, 25 cents for each dolla r of

reinsurance, but was quoted , in 2015, 6.78 cents for each dollar

of reinsurance , presumably for comparable loss exposures .

9. In recent negotiations, FHCF representatives were

concerned that some reinsurers may have had access to more

detailed loss - exposure data than was available to FHCF --

specifically, to covered properties ' street addresses or other

locational coordinates, rather than merely zip codes . Knowledge

of street address data would permit more accurate pricing of

reinsurance because, for the past ten to fifteen years, loss -

projection models have been able to analyze street address data

to produce more accurate projections of covered losses from

specified wind events. It is unnecessary to determine whether

the concern of the FHCF representatives was well - founded.

Regardless of w hether the possession of more - detailed data by

FHCF would restore parity with reinsurers or confer an advantage

over re insurers, access to this more - detailed data would improve

FHCF ' s bargaining posi tion when negotiating for the purchase of

reinsurance.

10. For these reasons, SBA and FHCF decided to obtain

from insurers their street address data with t he 2015 Data Call.

Rule 19 - 8.029, which incorporates the 2015 Data Call by

reference, cites as rulemaking authority section 215.555(3) and

cites as the law implemented section s 215.555(2), (3), (4), (5),

(6), (7), and (15) and 627.351(6) .

11. The rule - am endment process did not take long. O n

January 22, 2015, SBA published notice of development of the

proposed street address and other rules . By January 28, 2015,

FHCF had prepared the street address rul e s . FHCF provided notice

of a rule development works hop for the morning of February 5,

2015, and the FHCF Advisory Council provided notice of a meeting

to consider the proposed rules for the afternoon of the same day.

Pursuant to section 215.55 5(8), the advisory council is a nine -

member body that includes one representative of carriers, one

representative of reinsurers, one representative of insurance

agents, and representatives of other industries and consumers.

12. A t the workshop, a FHCF representative explained the

street ad dress rules, asked for questions or comments, and

received none. At the advisory council meeting, which was

attended by f ive of its members, a FHCF representative explained

the street address data and, again, received no questions or

comments.

13. On Mar ch 24, 2015, the SBA Trustees met to authorize

FHCF to file the proposed rule changes . The Trustees approved

the filing without discussion, and, on March 25, 2015, FHCF

published the proposed rules, including the street address rules.

On May 12, 2015, th e proposed rules became final.

14 . The silence of participating carriers during the

rulemaking process undermines the claim of the chief witness of

Petitioner and Intervenor that each carrier ' s street address data

represents its " crown jewels. " Nonethele ss, there is ample

evidence of the importance of street address data to insurers.

S treet address data is the foundation of the carrier ' s

relationship with its policyholders . Unlike zip code data,

street address data facilitates communications with policyholders

and access to other databases for policyholder information that

an insurer may use to generate additional revenues , not limited

to insurance . In this era of Big Data, the growth in the amount

of information accessible through a person ' s str eet address has

increased in the past year by an amount in excess of the increase

of this information in the preceding 30 years. Presently, o ver

500 pieces of additional information is available to the

possessor of street address data, obviously presentin g marketing

opportunities across many industries, not just insurance. And

this data retains much of its value even after a policyholder has

moved to another residence.

15. This data is less valuable to an insurer to the extent

that it is available from sources other than the insurer. In

particular, i f an insurer ' s street address data is obtained by a

competitor , the competitor may target the insurer ' s customers,

sparing its elf much of the customary costs of obtaining new

business . Thus, when transferring rights to their confidential

data, insurers include within the transfer agreement various

provisions ensuring the proper and secure use of the data and

providing for relief in the event of a breach of the agreement .

16. P roperty and casualty insurers also protect the ir

street address data from unauthorized disclosure by implementing

data - security technology . The ongoing threats posed by hackers

a nd advances in their technology requires constant updating of

insurers ' data - security technology.

17 . The importance of policyholders ' locational data has

long been recognized. In 1993, when creating FHCF, the

L egislature enacted section 215.557, which treats as confidential

and exempts from public records laws insurers ' reports of covered

property by zip code, which the statute acknowledges is

" proprie tary and trade secret information " that, if revealed,

" could substantially harm insurers in the marketplace and give

competitors an unfair economic advantage. " C h. 93 - 413, § 2, Laws

of Fla.

18. For its part , FHCF has implemented data - security

technology to safeguard insurers ' confidential information . The

reinsu rance contracts and SBA Policy 10 - 043 preserve the

confidentiality of all information submitted under a claim of

confidentiality. SBA and FHCF have impose d contractual

provisions requiring their consultant s to preserve the

confidentiality of all data identified as confidential by SBA or

FHCF , strictly limiting access to such data, and directing the

destruction of any such data received by the consultant s after

the completion of their work . However, in the e vent of a breach

of an agreement between SBA or FHCF and a contractor,

Petitioner ' s members would have no effective relief against SBA,

FHCF, or the contractor of SBA or FHCF.

19 . To transmit their 2015 Data Calls to SB A , insurers

upload the data, includi ng the street address data, onto an SBA

server using FHCF ' s Web Insurer Reporting Engine (WIRE). First

used for the 2014 data call, WIRE is a " secure web - based

program . " Fla. Admin. Code R. 19 - 8.029(2)(k). WIRE transfers

the data to an SBA server, where it is stored. In general, SBA

and FHCF prohibit the removal of confidential data stored on an

SBA server ; consultants, including the actuarial consultant, may

use their software to analyze this data, but may not remove data

from an SBA server . FHCF ' s chief operating officer testified

that , in connection with the premium - setting process, he intends

to share only the zip code data with the actua rial consultant.

Access to the street address data is further lim ited by the fact

that SBA and FHCF do not presently have programs to access the

data; someone trying to access this data would have to write code

to remove this data. Of course, FHCF write such code when it

uses the street address data to support its negotiations with

reinsurers. Based on these and perhaps other security

precautions , FHCF ' s chief operating officer testified that the

SBA server on which the street address data is stored cannot be

hacked.

20. C omputer - related crime, such as that proh ibited by

sections 815.01, et seq. , may be perpetrated by an unknown third

party or by an employee or consultant, with access to the data,

who acts with an intent to enrich himself, embarrass Respondents,

harm insurers , or cause panic among policyholders . It is

impossible to credit completely the blanket assurance of FHCF ' s

chief operating officer, whose range of expertise spans insurance

and loss model ing, but not computer security. T he ongoing nature

of data - security efforts suggests that the security r isks posed

by hackers and malevolent insiders are themselves dynamic.

Section 815.02(1) and (3) finds as much in acknowledging that

" [c]omputer - related crime " is a " growing problem " in the public

and private sectors, and the " opportunities for computer - related

crimes in financial institutions, government programs, government

records, and other business enterprises . . . are great. " These

risks to the among the most closely guarded collections of data

would not be " growing " and " great, " if absolute protection of

data were technologically feasible.

21. Prior to transmitting its street address data to FHCF,

each carrier ' s street address data is exposed to the risks

associated with its storage on the insurer ' s server or servers

and its acces s ibility by the insurer ' s employees and consultants.

New risks attach when the data is transmitted by internet to FHCF

and when the data i s then stored on an SBA server; multiple

storage points create multiple sets of risks.

22 . Petitioner is a trade association comprising 16

property and casualty insurers required to participate in the

FHCF. Petitioner ' s insurer members include Intervenor, as well

as four insurance industry consultants, who are irrelevant to

this case and are no t included in references to Petitioner ' s

" members. " Established in 1997, Petitioner ' s purpose is to

promote a healthy, competitive insurance market in Florida. By

the September 1, 2015, filing deadline for the 2015 Data Call,

all of Petitioner ' s members, except Intervenor, had timely filed

their 2015 Data Calls with the information required by fields 13

and 14.

23 . Intervenor timely filed its 2015 Data Call, but omitted

the information called for in fields 13 and 14 to avoid

Respondents ' mootness argument against Intervenor ' s standing , as

discussed below . By letter dated September 17, 2015, a copy of

which was sent to OIR, FHCF advised Intervenor that, as a result

of this omission, it was not in compliance with r ule 19 - 8.029.

The letter warns that possible consequences include FCHF ' s

withhold ing of reimbursement payments or advances from Intervenor

until it becomes compliant.

CONCLUSIONS OF LAW

24 . DOAH has jurisdiction over the subject matter because

Petition er and Intervenor are substantially affected by the

street address rules . §§ 120.56(1)(a) and (e), 120.569, and

120.57 , Fla. Stat . Although it has been determined that

Petitioner is substantially affected by the street address rules,

DOAH would have jurisdiction, even if onl y Intervenor were

substantially affected. This is a challenge to existing rules,

and Intervenor ' s filing did not fail to meet any deadline, so it

could have been filed as an original petition. The

Administrative Law Judge rejects as inapplicable to a rul e

challenge proceeding Respondents ' arguments in their proposed

final order for the prioritization of parties, so as to confer

primary importance on a permit applicant and the permitting

agency and relegate the intervenor to secondary status, so that,

for example, it may not survive a settlement between the

applicant and agency or may not raise issues not raised by the

applicant and agency.

25 . Intervenor ' s status as a substantially affected

person is clear . Rule 19 - 8.029(4)(e) incorporates the 2015 Data

Ca ll . Rule 19 - 8.029 implements provisions of section 215.555.

Section 2 15.255(10) provides that a violation of section 2 15.255

or t he rules adopted under section 2 15.255 constitute s a

violation of the Florida Insurance C ode. Section 624.418(2)(a)

authorizes OIR to suspend or revoke the certificate of authority

of any insurer that has violated any provision of the Florida

Insurance C ode. On this authority , OIR has the discretion to

suspend or revoke Intervenor ' s certificate of authori ty for its

failure timely to submit the street address data demanded by

fields 13 and 14 of the 2015 Data Call.

26 . A perso n is substantially affected by a rule that

regulates the person. See , e.g. , Lanoue v. Fla . Dep ' t of Law

Enf . , 751 So. 2d 94 (Fla. 1st DCA 1999); Cole Vision Corp. v.

Dep ' t of Bus . & Prof ' l Reg . , 688 So. 2d 404 (Fla. 1st DCA 1997) ;

Ward v. Bd . of Tr s. of the Int . Imp . Trust Fund , 651 So. 2d 1236

(Fla. 4th DCA 1995) (per curiam) . A person is not required to

violate a regulatory rule to be substantially affected. Prof ' l

Firefighters of Fla . v. Dep ' t of HRS , 396 So. 2d 1194 (Fla. 1st

DCA 1981). Sharpening its presentation of impact , though,

Intervenor has violated the filing requirement that includes the

street address rules, and FHCF has formally notified OIR of this

violation of the Florida Insurance Code .

27 . Petitioner ' s status as a substantially affected person

is more complicated . In Florida Home Builders Association v.

Department of Labor and Employment Security , 412 So. 2d 351 (Fla.

1982), the Florida Supreme Court held that a trade association

may be substantially affected by a rule if its members are

substantially affected by the rule that does not otherwise affect

the association. Seven y ears later, in Coalition of Mental

Health Professions v. Department of Professional Regulation , 546

So. 2d 27 (Fla. 1st DCA 1989), the court applied to an

association the well - established principle concerning regulatory

rules set forth in the preceding par agraph, so that, if the

associationÓs members are regulated by the challenged rule, the

association is also substantially affected by the rule.

28 . However, Respondents claim that the street address

rules no longer regulate Petitioner ' s members because, other than

Intervenor, they have already filed their street address data .

T he case law does not address a rule requiring a one - time act ,

such as f iling the 2015 Data Call , or whether a person, post -

compliance, still is regulated by a rule requir ing a one - time

act. In r ecognizing that a person regulated by a rule is

substantially affected by the rule, courts have adopt ed an

abbreviated impact determination in the interest of simplicity

and predictability. Respondent ' s argument for ephemeral

regulation invites the kind of excessively demanding analysis of

impa ct that is discussed below and, on this ground alone, should

be rejected . Of course , s tanding determinations are reviewed on

appeal de novo, see , e.g. , Off . of Ins. Reg. v. Secure Enter s. ,

124 So. 2d 332, 336 (Fla. 1st DCA 2013), so, in an abundance of

caution, id. , this final order will consider whether Petitioner

is substantially affected , even if its members, other than

Intervenor, are no longer regulated by the street address rules

since their filing of their 2015 Data Calls with the street

address data.

29. An association is substantially affected by a rule if

" a substantial number of its members, although not necessarily a

majority, are " substantially affected " by the challenged rule[,]

the subject matter of the rule [is] within the association ' s

general scope of interest and activity, and the relief requested

[is] of the type appropriate for a trade association to receive

on behalf of its members . " NAACP v. Fla. Bd. of Regents , 863 So.

2d 294, 298 (Fla. 2003) ( citing Fla. Home Builders , supra at 353 -

54 ) .

30 . Petitioner satisfies the second and thir d prongs .

Members ' loss of street address data reduce s competition in the

marketplace . Obtaining relief in the form of the invalidation of

the street address rules would promote the competitive interests

of the members.

31 . Petitioner satisfies the first prong if a substantial

number of its members, not merely Intervenor, are substanti ally

affected by the street address rules. Respondents ' defense of

mootness claims that these members are unable to show an injury

in fact. This defense acknowledges a past impact -- essentially,

being subject to the regulatory requirement of filing the street

address data -- but contends that no present effects remain from

this past impact. This clear past impact, as well as the

possibility of a future impact, as discussed below, are major

impacts that yield a lesser, but still substantial, present

impact that means that Petitioner satisfies the first prong.

32. In Department of Offender Rehabilitation v. Jerry , 353

So. 2d 1230 (Fla. 1st DCA), cert. denied , 359 So. 2d 1215 (Fla.

1978) , an inmate was charged with violating a rule prohibiting

prison assault , was found guilty, served the penalty of

disci p linary confinement , and then challenged the rule. The

agency made a mootness argument, claiming that the inmate was no

longer affe cted by the disciplinary rule.

33. In this early case of rule challenge standing, t he

Jerry court surveyed a wide array of cases to find the meaning of

" substantially affected . " From a United S tates Supreme Court

case involv ing a third - party challen ge to an environmental

permit, the Jerry court borrowed a two - prong test : the

challenger had to show an " injury in fact, " and the injury had to

be to an interest arguably within the " zone of interest " to be

protected or regulated by the statute that the agency was claimed

to have violated . Id. at 1233. The court focused on the

re quirement of an injury to ensure that the litigant had a direct

stake in the controversy and to prevent the litigant from

reducing the judicial process to " no more than a vehicle for the

vindication of the value interests of concerned bystanders . " Id.

at 1234.

34. T he Jerry court cited another United States Supreme

Court case to s uggest that the inmate had not suffered an injury .

In a class action seeking injunctive relief against law

enforcement officers, the Supreme Court held that past exposure

to illegal conduct does not establish a case and controversy

warranting injunctive relief, if unaccompanied by any continuing,

present adverse effects. Id. at 1234 - 35. The Supreme Court

characterized as " speculation and conjecture " the possibilities

that the plaintiffs would be arrested in the future and taken

before the court officials whom they claimed had engaged in

illegal discrimination in setting bond. Id. at 1235.

35. Applying the requirement of an injury in fact to the

inmate , the Jerry court found that he " failed to show injury

which is accompanied by any continuing, present adverse effects "

because he was no longer serving disciplinary confinement. Id.

The prospect of future injury was dependent on a future

disciplinary infraction -- a contingency that the court found to be

a matter of " speculation and conjecture. " Id. at 1236. Such

speculation would not be consistent with the inmate ' s

presentation of " i ssues of ' sufficient immediacy and reality '

necessary to confer standing. " Id. Finding no injury, the Jerry

court did not address the zone of interest prong.

36. The Jerry court recognizes that a present impact may be

traced to a past or future impac t. The evidentiary record was

not particularly well developed as to present impact . Perhaps

for this reason, the opinion does not attempt to trace present

impacts from past and future impacts, such as by discussing

whether a second disciplinary offense w ould result in harsher

punishment or whether the first disciplinary offense, if the

assault was the first offense, might have established a

proclivity toward noncompliant behavior or fighting in

particular . The record did reveal that the rules entitled th e

inmate to " at least " 24 hours from receipt of the notice to the

commencement of the disciplinary hearing, and any punishment was

typically administered within seven days of the hearing, so the

inmate ' s opportunity to challenge the disciplinary rule was

l ikely less than ten days ; but the latter fact escaped the

court ' s notice, or these facts were irrelevant to the court .

37. In Department of Health and R ehabilitative Services v.

Alice P. , 367 So. 2d 1045 (Fla. 1st DCA 1979) , several persons

challenged a proposed rule discontinuing Medicaid reimbursements

to health care providers for therapeutic, elective abortions.

The holding of the case applies only to two petitioners because

the petitions of the other challengers were un timely (on grounds

not applicable to Intervenor ' s petition) . Although unnoted in

the final order, answers to interrogatories revealed that the two

petitioners, Alice P. and another woman, were no longer pregnant.

The agency filed a motion to dismiss based on a mootness

argument, claiming that the two challengers were no longer

affected by the proposed rule. Rejecting the challengers '

characterization of Jerry as a " somewhat restrictive view " of

rule challenge stan ding, id. at 1051 -- a point later addressed by

the Florida Supreme Court, as mentioned below -- the Alice P. court

held that the challengers were not substantially affected by the

proposed rule and compared their situation to that of the Jerry

inmate, who " ha d prior to the challenge been directly affected by

the [rule ' s] operation. " Id. It is impossible to determine from

the record the duration of time between when the petitioners had

discovered they were pregnant to when they decided that they

could wait no longer to terminate their pregnancies.

38 . Jerry and Alice P. were similar in the presentation of

challengers who had been substantially affected by rules in the

past and could possibly be substantially affected by these rules

in the future, although t he Alice P. court did not address that

aspect of the case. In both cases, present, lesser impacts could

be traced from these past and future impacts, but the courts did

not analyze them in any detail.

39 . A different holding resulted in Professional

Fire fighters of Florida v. Department of Health and

Rehabilitative Services , 396 So. 2d 1194 (Fla. 1st DCA 1981) .

T wo firefighters who performed paramedic services challenged a

rule that would require them to obtain paramedic certifications

by a specific deadline. The two firefighters had not filed

applications and , thus, had not been denied certification. The

Professional Firefighters court distinguished the chall engers in

Jerry and Alice P. , who " were not subject to the rule or

immediately affected by it at the time suit was filed and were

unlikely to be affected in the future. " Id. at 1196. By

contrast, t he court found that the firefighters " were affected by

the licensing rules because they currently work in the area to be

regulated. " Id. To some degree, the Professional Firefighters

court also relied on the principle that a person is substantia lly

affected by a rule regulating the pe rson ' s occupation or

pro fession . Id. But, as the subject case reveals, the duration

of sufficient impact is not always clear when applying the

principle that a person is substantially affected by a rule that

regulates the person. The most interesting aspect of

Professional Fir efighters is that the court recognized the

sufficiency of a present impact that was overshadowed by the

possibility of a more substantial future impact following

application, denial, and, after the deadline for compliance had

passed, disciplinary prosecuti on.

4 0 . In none of these three opinions is there much of an

attempt to trace the linkage between the challenger and the

challenged rule. Instead of undertaking this sometimes -

challenging, case - by - case determination, the opinions reveal a

preference for a more abbre viated process in which, say, a

regulatory rule may always be challenged or a present injury must

achieve a level of robustness that demand s more than that the

challenger be substantially affected.

4 1 . I n Florida Home Builders , supra , nonunion Florida

b uilding contractors challenged a rule concerning apprenticeship

programs in the building trades. No one challenged the hearing

officer ' s determination that the contractors were competitively

disadvantaged by the challenged rule. As noted above, the

holdi ng was merely that the contractors ' trade association could

be substantially affected by the rule on the sole ground that its

members were substantially affected .

4 2 . T he Florida Supreme Court ' s opinion disapproves of

Jerry to the extent that Jerry conflicts with Florida Home

Builders , but t he opinion does not reveal the precise object of

disapproval. Jerry had nothing t o do with associations, so the

court was not disapproving of the lower court ' s treatment of

associations. Jerry clearly involved the extent to which a

present impact could be derived from a past and possibly a future

impact, but the present impact of the rule in Florida Home

Builders was not in dispute, so the court was not likely

disapproving of the lower court ' s failure to trace a present

impact from a past or future impact. By a process of

elimination, t he court seems to have been targeting the

requirement of an " injury in fact " and similar language used to

restate the requirement that the challenger be substantially

affected by the rule. Early in the Florida Home Builder s

opinion, the court noted that Jerry " expressly requires a person

to show injury or immediate threat of injury from operation of

the challenged rule in order to have standing under section

120.56(1). " Fla. Home Builder s at 351. At the end of the

Florida Home Builder s opinion, the court expressed the first

prong of its associational standing test in the language of the

statute, as emphasized by its quotation marks: " To meet the

requirements of section 120.56(1) , an association must

demonstrate that a substantial number of its members, although

not necessarily a majority, are ' substantially affected ' by the

challenged rule. " Id. at 353.

4 3 . Twenty - one years later, in NAACP , supra , the Florida

Supreme Court again disapproved of the Jerry language . T hree

persons challenged several rules withdrawing advantages

previously enjoyed by minorities seeking admission to state

universities. In addition to the NAACP, whose members were

predominantly prospective, not current, university applicants,

the other challengers were a tenth - grade student who had not yet

applied to a university and his mother, who wanted the bes t,

educationally, for her son.

4 4 . In a 2 - 1 decision with a dissenting opinion by J udge

Browning, the First District Court of Appeal reversed the hearing

officer who had found that each challenger was substantially

affected b y the rules. In doing so, the court summarized rule

challenge standing law as follows:

Standing to challenge proposed or existing

administrative rules is governed by statute

in Florida. Section 120.56(1)(a), Florida

Statutes (1999), states that only those who

are " substantially affected by a rule or a

proposed rule may seek an administrative

determination of the invalidity of the rule

on the ground that the rule is an invalid

exercise of delegated legislative

authority. " To demonstrate that one is or

will be " substantially affected by a rule or

a proposed rule, " one must establish both

that application of the ru le will result in

" a real and sufficiently immediate injury in

fact " and that " the alleged interest is

arguably within the zone of interest to be

protected or regulated. " See , e.g. , Lanoue

v. Fla. Dep ' t of Law Enforcement , 751 So. 2d

94, 96 (Fla. 1st DCA 1999); Ward v. Bd. of

Trs. of Internal Improvement Trust Fund , 651

So. 2d 1236, 1237 (Fla. 4th DCA 1995); All

Risk Corp. of Fla. v. State Dep ' t of Labor &

Employment Sec. , 413 So. 2d 1200, 1202 (Fla.

1st DCA 1982); Fla. Dep ' t of Off ender Rehab.

v. Jerry , 353 So. 2d 1230 (Fla. 1st DCA

1978). An injury is not " real and

sufficiently immediate " if the likelihood of

its occurrence rests upon speculation or

conjecture. See , e.g. , Ward , 651 So. 2d at

1237; Jerry , 353 So. 2d at 1236.

NAAC P v. Fla. Bd. of Regents , 822 So. 2d 1, 3 - 4 (Fla. 1st DCA

2002).

4 5 . Although it could have relied on Professional

Firefighters to conclude that prospective applicants were

substantially affected, the Florida Supreme Court attempted a

reorientation of rul e challenge standing law . The court rejected

any requirement that a substantially affected person " demonstrate

immediate and actual harm -- i.e., rejection of admission to a

state university, " explaining that " [ w ] e required no such showing

in Florida Home Builders . " NAACP at 300. Characterizing the

requirement of " immediate and actual harm " as a " substantial

narrowing of the concept of standing as defined in Florida Home

Builders , " id. , the court required a showing only of a

" substantial effect of the rul e change on a substantial number of

the association ' s members. " Id. It was sufficient that a

substantial number of NAACP members were " genuine prospective

candidates for admission, " even though they were not " current

applicants. " Id.

4 6 . The Florida Supreme Court ignored completely the zone

of interest prong . The existence of this prong , which alone has

never denied standing to a rule challenger, suggest s that a

person could suffer a real and sufficiently immediate injury in

fact from a r ule, but not be substantially affected because the

person ' s interest was not in the proper zone. At least as

app lied, the first prong may overstate the statutory requirement,

but the second prong, adding a requirement to the first prong ,

has no legitimate role whatsoever in determining whether a person

is substantially affected by a rule.

4 7 . The NAACP court restated one of its reasons, as noted

in Florida Home Builders , supra , for holding that a trade

association could have standing to challenge a rule for which

only its members were substantially affected. The court

explained that "

expand rather than restrict public participatio n in the

administrative process. " The NAACP opinion recites the following

from Fl orida Home Builders :

We find the district court ' s restriction on

the standing of associations is an

excessively narrow construction of section

120.56(1) and results in restricted public

access to the administrative processes

established in the Florida Ad ministrative

Procedure Act, chapter 120, Florida Statutes

(1979). Expansion of public access to the

activities of governmental agencies was one

of the major legislative purposes of the new

Administrativ e Procedure Act. [f ootnote

omitted.] In our view, t he refusal to allow

this builders ' association, or any similarly

situated association, the opportunity to

represent the interests of its injured

members in a rule challenge proceeding

defeats this purpose by significantly

limiting the public ' s ability to c ontest the

validity of agency rules.

NAACP , supra at 298 (citing Fla . Home Builders , supra at 352 - 53 ) .

4 8 . Considerations of access may explain the Florida

Supreme CourtÓs first holding that the status of the members

passes through to the association and its second holding that the

members were themselves substantially affected . Considerations

of access, though, should at least militate against the formation

and application of judge - made principles that require challengers

to show more than that they are substantially affected by the

challenged rules.

49 . F or its test, the NAACP court agreed with Judge

Browning ' s dissenting opinion that NAACP ' s members were

substantially affected by the new affirmative action rules

because the impact of these rules on them was different than the

impact of these rules on all citizens and nonminority applicants

in particular. Id. at 299. This language suggests a test no

more rigorous than that described in the language quoted in Jerry

that the purpose of the requirement of an injury was to ensure

that the litigant had a direct stake in the controversy and to

prevent the litigant from reducing the judicial proces s to " no

more than a vehicle for the vindication of the value interests of

concerned bystanders. "

50 . Three related impacts are evident in the subject case.

The greatest impact is the risk of unauthorized disclosure of the

street address data, such as by hacking or unauthorized action by

a rogue employee or consultant. The next greatest impact was the

requirement that carriers transmit their street address data from

the carriers to FHCF by the WIRE. (Intervenor is substantially

affected, not only because it is clearly still regulated by

fields 13 and 14, but because the transmission of this data to

FHCF remains imminent.) The least impact is the present impact

from the transmission of the str eet address data and the present

impact reflecting the prospect of unauthorized disclosure of the

street address data. As in Professional Firefighters , a lesser

impact is not, by definition, an insubstantial impact.

5 1 . Petitioner ' s members remain substa ntially affected by

the transmission of the street address data to SBA and FHCF.

Respondents ' mootness argument assumes that Petitioner ' s members

cannot unring the bell. This would be true if the rule had

required public disclosure, and Petitioner ' s memb ers had al ready

complied. But the data has been disclosed only to SBA and FHCF --

and they have had the data for no more than a few weeks -- so an

order invalidating the rules may facilitate relief, by

negotiation or judicial process, in the form of eliminati ng all

vestiges of this data in the possession of Respondents.

5 2 . PetitionerÓs members are also substantially affected,

at present, by the risk of disclosure of the street address data

in the future. The measure of this present impact is a function

of t he consequence of disclosure and the likelihood of

disclosure. As noted above, the consequence clearly would be

great. The risk or probability of disclosure requires

consideration of contingencies.

5 3 . In NAACP and Professional Firefighters , the

consequences were great, and the risks were much harder to

address. These cases demonstrate that the risk analysis is not

so fine as to require that a court attempt some sort of

quantification of risk -- and then apply some test for minimum

required r isk . In both of these cases, myriad contingencies

stood between the challengers, in their present circumstances,

and the major impacts that they sought to avoid.

54. I n Professional Firefighters , the contingencies

included the continued performance of paramedic services by the

firefighters to the point at which the rule became effective, the

firefighters ' applications for certification, the agency ' s denial

of their applications, and the agency ' s prosecution of the

firefighters for violating the rule. I n NAACP , the contingencies

included the students ' successful completion of high school,

the ir desire and academic, financial, and emotional readiness to

pursue a higher education, their application to one or more state

universities, their satisfaction of o therwise - applicable

requirements for admission to a state university ; and the denial

of their applications solely on the marginal grounds between what

was required before and after the challenged affirmative - action

rule amendments.

55 . Considering the consequences of denied university

admissions and the inability to provide paramedic services

without disciplinary exposure and the probabilities that these

consequences would occur, the challengers in NAACP and

Professional Firefighters proved that they ha d direct stakes in

the challenged rules; they were affected differently from other

citizens, nonminority students, and paramedics; and they were

clearly not concerned bystanders using rule challenge proceedings

as vehicles for the vindication of their valu e interests.

5 6 . The analysis of consequence and risk in the subject

case likewise supports the conclusion that Petitioner ' s members

are substantially affected by the street address rules. As in

NAACP , and Professional Firefighters , there is a risk of

disclosure beyond SBA and FHCF. Further description of the risk

invites the identification of hard and fast rules, but it

suffices to describe the risk as not speculative or theoretical,

as evidenced by the L egislature ' s concern with these " growing "

and " great " risks to computer - stored data and the focus of

Respondents, as well as the private sector, on meeting the ever -

increasing challenges of computer - related crime .

5 7 . Petitioner ' s members are not mere bystanders using this

proceed ing to vindicate their value interests. As the

challengers in NAACP litigated their educational opportunities

and the challengers in Professional Firefighters litigated their

conditions of employment, so the challengers here are litigating

their ability to exploit financially the locational data attached

to their policyholders. Without characterizing the impacts on a

privacy foundation or small group of policyholders challenging

the same street address rules on privacy grounds, the impacts on

Petitioner ' s members present comparatively in a most graphic

manner: the preservation of core assets and the leveraging of

these assets into income streams and cash flow.

5 8 . For these reasons, a substantial number of Petitioner ' s

members are substantially affect ed persons. Having satisfied the

three prongs set forth in Florida Home Builders , Petitioner

itself is a substantially affected person.

59 . Section 120.56(1) authorizes a substantially affected

person to seek the invalidation of a rule on the ground that it

is an invalid exercise of delegated legislative authority.

Section 120.56(3)(a) imposes upon Petitioner and Intervenor the

burden of prov ing by a preponderance of the evidence that the

street address rules are an invalid exercise of delegated

legislative authority.

60 . Section 120.52(16) states that a rule includes " a form

which imposes any requirement or solicits any information not

speci fically required by statute or by an existing rule. " The

street address rules contained in the 2015 Data Call meet this

definition.

6 1 . Section 120.52(8)(b) through (e) provides that a rule

is an invalid exercise of delegated legislative authority if:

(b ) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by s. 120.54(3)(a)1.;

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required

by s. 120.54(3)(a) 1.;

(d) The rule is vague, fails to establish

adequate standards for agency decisions, or

vests unbridled discretion in the agency;

[or]

(e) The rule is arbitrary or capricious. A

rule is arbitrary if it is not supported by

logic or the necessary facts; a rule is

capricious if it is adopted without thought

or reason or is irrational[.]

A grant of rulemaking authority is necessary

but not suff icient to allow an agency to

adopt a rule; a specific law to be

implemented is also required. An agency may

adopt only rules that implement or interpret

the specific powers and duties granted by

the enabling statute. No agency shall have

authority to ado pt a rule only because it is

reasonably related to the purpose of the

enabling legislation and is not arbitrary

and capricious or is within the agency ' s

class of powers and duties, nor shall an

agency have the authority to implement

statutory provisions se tting forth general

legislative intent or policy. Statutory

language granting rulemaking authority or

generally describing the powers and

functions of an agency shall be construed to

extend no further than implementing or

interpreting the specific powers and duties

conferred by the enabling statute.

6 2 . Petiti oner and Intervenor have failed to prove that the

street address rules are arbitrary or capricious or are vague,

fail to establish adequate standards for agency decisions, or

vest unbridled discretion in the agency. Fields 13 and 14 are

quite clear in the information that they demand, and the street

address data would be useful to FHCF in purchasing as much

reinsurance for as low a price as possible. The street address

rules would help FHCF " provide a stable and ongoing source of

reimbursement to insurers for a portion of their catastrophic

losses . . ., " as it is required to do by statute .

6 3 . The rul emaking authority cited by the rule is section

215.555(3). In material part, this statute states :

The board may adopt such rules as are

reasonable and ne cessary to implement this

section and shall specify interest due on

any delinquent remittances, which i nterest

may not exceed the fund ' s rate of return

plus 5 percent. Such rules must conform to

the Legislature ' s specific intent in

establishing the fund as expressed in

subsection (1), must enhance the fund ' s

potential ability to respond to claims for

covered events, must contain general

provisions so that the rules can be applied

with reasonable flexibility so as to

accommodate insurers in situations of a n

unusual nature or where undue hardship may

result, except that such flexibility may not

in any way impair, override, supersede, or

constrain the public purpose of the fund,

and must be consistent with sound insurance

practices. The board may, by rule, p rovide

for the exemption from subsections (4) and

(5) of insurers writing covered policies

with less than $10 million in aggregate

exposure for covered policies if the

exemption does not affect the actuarial

soundness of the fund.

6 4 . The third sentence of the statute authorizes SBA to

adopt rules to exempt certain small insurers from entering into

reimbursement contracts and paying reimbursement premiums --

authority that is not at issue in this case. The first sentence

of the statute contains a general g rant of rulemaking authority

and a specific grant of authority -- in fact, a statutory

directive -- for SBA to adopt rules specifying interest on

delinquent remittances from insurers. The statutory directive

concerning interest is not at issue in this case.

6 5 . The second sentence starts with " [s]uch rules. " This

reference is to rules in the first sentence. The breadth of some

of the provisions of the second sentence, such as the requirement

that such rules must conform to the intent of the L egislatu re in

e stablishing FHCF, clarifies that " such rules " applies to all

rules ref erenced in the first sentence. SBA enjoys so little

discretion in setting interest rates on delinquent remittances

that a reminder that its interest rate rules must conform to the

overa ll in tent of the L egislature would make little sense .

6 6 . " Such rules " thus modifies the general grant of

rulemaking authority. In itself, the general grant of rulemaking

authority is, in the above - cited words of the flush language of

section 120.52(8), " necessary but not sufficient to allow an

agency to adopt a rule. " The question thus arises whether the

provisions of the second sentence of section 215.555(3)

constitute grants of additional authority or limitations upon the

grant of general authority in the first sentence . I f the latter,

the insufficiency of the general g rant of authority in the first

sentence would not support limitations because the initial grant

of general authority is effectively a nullity.

6 7 . But, e ven if the provisions of the second sentence

constitute grants of additional authority, they would fai l to

meet the standards of the flush language of section 120.52(8).

The first provision of the second sentence provides that such

rules must conform to t he L egislature ' s intent in establishing

the fund: i.e., provide a stable and ongoing source of

reimbu rsement to insurers. If this is a grant of additional

authority, it is too general to support the street address rules

or any rules except possibly a rule of interpretation to be

applied to other rules. The same is clearly true of the third

and fourth pr ovisions of the second sentence: the third sentence

provides that the rules must be general so they can be applied

flexibly, and the fourth sentence provides that the rules must

conform to sound insurance practices. These statutory provisions

clearly do not authorize SBA to adopt a wide range of substantive

rules providing a stable and ongoing source of reimbursement,

afford ing insurers flexibility, and conform ing to sound insurance

practices.

6 8 . In this context, the limi tations of the second

provision in the second sentence are more apparent. Such rules

must enhance FHCF ' s ability to respond to claims for covered

events. Arguably, the street address data fit wi thin this

provision because FHCF ' s access to this data will maximize the

reinsurance that FH CF may obtain for the funds that it has

available to purchase reinsurance. The problem is in the general

nature of the second provision. If it authorizes the demand for

street address data, it equally authorizes reimbursement premium

surcharges or demand s for p ersonal guarantees from insurersÓ

principals for overdue remittances , either of which would also

enhance FHCF ' s ability to respond to claims for covered events .

The statutory reference to enh ancing FHCF ' s ability to respond to

claims for covered ev ents is too broad to constitute a specific

power to support rulemaking requiring the disclosure of street

address data .

69 . Although not cited as a source of rulemaking authority,

section 215.555(4)(f) confers a specific power or duty and

authorizes SBA to adopt rules pursuant to such power or duty.

This statute authorizes a rule to establish standards for SBA to

conduct audits to ensure that insurers have properly reported

insured values and losses for which FHCF has paid reimbursements.

Specifically, the statute directs SBA to " inspect, examine, and

verify the records of each insurer ' s covered policies . . .

according to standards established by rule for the specific

purpose of validating the accuracy of exposures and losses

required to be reported under the terms and conditions of the

reimbursement contract. " This statute involves covered property,

but authorizes SBA merely to adopt standards for the inspection,

examination, and verification of records, not standards for what

records, such as stree t address data, must be maintained or

transmitted to FHCF.

7 0 . For these reasons, the street address rules are an

invalid exercise of delegated legislative authority because SBA

has exceeded its grant of rulemaking authority.

7 1 . The flush language of section 120.52(8) provides that

SBA may adopt rules only that " implement or interpret the

specific powers and duties granted by the enabling statute. " SBA

has specific powers and duties underlying its demand for data

concerning covered property. Section 215.555(5)(c) provides

that, by September 1 of each year, each insurer shall notify SBA

of its " insured values under covered policies by zip code, " and,

" on the basis of these reports, [SBA] shall calculate the premium

due from the insurer, based on the fo rmula adopted under

paragraph (b). " The level of locational detail authorized by

statute is zip code, not street address. The specific power or

duty of SBA is to demand annually zip code data, not street

address data. Consistent with the statutory autho rity vested in

SBA to demand zip code data, section 215.557 provides that

" reports of insured values under c overed policies by zip code

. . . are confidential. "

7 2 . Respondents rely on other statutory provisions covering

different matters and claim that these provisions are the law

implemented by the street address rules. The problem with this

argument is that these provisions do not directly apply to the

annual requ irement to report information about covered property.

By stretching these more general provisions to the specific,

clearly applicable provisions of section 215.555(5)(c),

Respondents create a tension between these general provisions and

the more specific provision, where the plain reading of the

general provisions leaves no hint of a conflict. Statutes

providing FHCF to adopt an annual reimbursement contract or a

reimbursement premium formula, to issue post - loss revenue bonds,

to obtain reinsurance, and t o enter into various financial

transactions constitute specific powers and duties to be

implemented by rules -- covering those matters, not the disclosure

of street address data.

7 3 . For these reasons, the street address rules are an

invalid exercise of d elegated legislative authority because the

rules enlarge, modify, and contravene the law implemented.

ORDER

It is ORDERED that :

1. T he street address rules are invalidated as an invalid

exercise of delegated legislative authority.

2. The Administrative Law Judge reserves jurisdiction on

the request of Petitioner and Intervenor for attorneys ' fees and

costs under section 120.595(3). The Administrative Law Judge

will address this issue only if, within 30 days of the date of

this F inal O rder, Petitioner or Intervenor files with DOAH a

petition for attorneys ' fees and costs.

DONE AND ENTERED this 9th day of October , 2015 , in

Tallahassee, Leon County, Florida.

S

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of October , 2015 .

COPIES FURNISHED:

Pam Bondi, Attorney General

Department of Legal Affairs

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

Nate Wesley ("Wes") Strickland, Esquire

Colodny Fass, P.A.

215 South Monroe Street , Suite 701

Tallahassee, Florida 32301

(eServed)

Anne Longman, Esquire

Lewis, Longman and Walker , P.A.

315 South Calhoun Street , Suite 830

Tallahassee, Florida 32301 - 1872

(eServed)

Wayne E. Flowers, Esquire

Lewis, Longman and Walker, P.A.

245 Riverside Av enue , Suite 150

Jacksonville, Florida 32202 - 4931

(eServed)

Ken Chambers, Inspector General

State Board of Administration

1801 Hermitage Boulevard, Suite 100

Tallahassee, Florida 32308

Ash Williams, Executive Director and Chief

Investment Officer

Stat e Board of Administration

1801 Hermitage Boulevard, Suite 100

Post Office Box 13300

Tallahassee, Florida 32317 - 3300

Ernest Reddick, Chief

Department of State

R. A. Gray Building

500 South Bronough Street

Tallahassee, Florida 32399 - 0250

(eServed)

Alexandra Nam

Department of State

R. A. Gray Building

500 South Bronough Street

Tallahassee, Florida 32399 - 0250

(eServed)

Ken Plante, Coordinator

Joint Administrative Procedures Committee

Room 680, Pepper Building

111 West Madison Street

Tallahassee, Fl orida 32399 - 140

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

to judicial review pursuant to section 120.68, Florida Statutes.

Review proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the original

notice of administrative appeal with the agency clerk of the

Division of Administrative Hearings within 30 days of rendition

of the order to be reviewed, and a copy of the notice,

accompanied by any filing fees prescribed by law, with the clerk

of the District Court of Appeal in the appellate district where

the agency maintains its headquarters or where a party resides or

as otherwise provided by law. Courtesy