Reimbursement Contract, Procedures to Determine Ineligibility for Participation in the Florida Hurricane Catastrophe Fund and to Determine Exemption from Participation in the Florida Hurricane Catastrophe Fund, Revenue Bonds Issued Pursuant to ...

 

STATE BOARD OF ADMINISTRATION

RULE NO: RULE TITLE
19-8.010: Reimbursement Contract
19-8.012: Procedures to Determine Ineligibility for Participation in the Florida Hurricane Catastrophe Fund and to Determine Exemption from Participation in the Florida Hurricane Catastrophe Fund
19-8.013: Revenue Bonds Issued Pursuant to Section 215.555(6), F.S
19-8.029: Insurer Reporting Requirements

NOTICE OF CHANGE

Notice is hereby given that the following changes have been made to the proposed rule in accordance with subparagraph 120.54(3)(d)1., F.S., published in Vol. 34, No. 16, April 18, 2008 issue of the Florida Administrative Weekly.

NOTICE IS HEREBY GIVEN by the State Board of Administration of Florida, in accordance with subparagraph 120.54(3)(d)1., F.S., that the changes to Rules 19-8.012 and 19-8.013, F.A.C. and changes to forms incorporated into Rules 19-8.010 and 19-8.029, F.A.C., which changes are listed below, have been made since the publication of the above-listed rules in the Florida Administrative Weekly (FAW) on February 15, 2005, in Vol. 34, No. 7. The changes noticed are numbered 1. through 9., below.

19-8.010 Reimbursement Contract.

The rule has not changed; however the following changes have been made to the Reimbursement Contract incorporated into this rule:

1. Article X(2)(a), in the Reimbursement Contract, form FHCF-2008K, has been amended to remove the reference to “regulatory supervision” and the following new sentence has been added to the end of the paragraph:

Such acceleration will not apply when the receiver or rehabilitator provides a letter of assurance to the FHCF that the Company will have the resources to pay the premium in installments in accordance with the contractual provisions.

2. Article X(3)(b)5.b. and (4)(e)8., in the Reimbursement Contract, which is given the form identification of FHCF-2008K:  The word “self-insured” has been replaced with the word “self-insurance” in each subparagraph.

3. Article X(4)(f) in the Reimbursement Contract, form FHCF-2008K, has been stricken in its entirety.

4. The statutory citation in Appendix A to Addendum No. 3 to Reimbursement Contract has changed from 215.555(5)(2) to 215.555(5)(e).

19-8.012 Procedures to Determine Ineligibility for Participation in the Florida Hurricane Catastrophe Fund and to Determine Exemption from Participation in the Florida Hurricane Catastrophe Fund Due to Limited Exposure.

5. Subsection (3)(a) of Rule 19-8.012, F.A.C. has had the following underlined language added to it:

(3) Procedures to Determine Exemption from the Fund Due to Limited Exposure.

(a) An insurer requesting exemption from participation in the Fund because its exposure for covered policies, as defined in Section 215.555(2)(c), F.S., and in Article V of the reimbursement contract, as adopted and incorporated by reference in Rule 19-8.010, F.A.C., is less than $10 million in the aggregate shall submit a written request for a determination regarding such an exemption no later than June 1 of the upcoming contract year. If requested within thirty days of writing its first covered policy, a new participant, as defined in Article V of the reimbursement contract, may request exemption if its exposure is less than $10 million in the aggregate and is expected to remain less than $10 million in the aggregate for the remainder of the contract year. The request shall be sent to the Fund’s Administrator, Paragon Strategic Solutions Inc., at 3600 American Boulevard West, Suite 700, Minneapolis, Minnesota 55431. The insurer shall submit the following information no later than June 30 of the upcoming contract year:

Specific Authority 215.555(3) FS. Law Implemented 215.555(2)(c), (3), (4), (5) FS. History–New 2-17-97, Amended 6-2-02, 5-13-03, 5-19-04, 5-29-05, 5-10-06,________.

 

19-8.013 Revenue Bonds Issued Pursuant to Section 215.555(6), F.S.

6. The words “tax-exempt post-event” have been added in three places in (4)(c)2. since the Notice of Proposed Rulemaking was published. These words were added for clarification. In addition, Contract Year 2006-2007 was changed to read 2006/2007. This subparagraph now reads as follows:

(4)(c)2. Except as required by Section 215.555(7)(c), F.S., or as described in the following two sentences, Reimbursement Premiums, together with earnings thereon, received in a given Contract Year will be used only to pay for losses attributable to Covered Events occurring in that Contract Year or for losses attributable to Covered Events in subsequent Contract Years and will not be used to pay for past losses or for debt service on tax-exempt post-event revenue bonds. Amounts collected during the in Contract Year 2006/2007 2006-2007 as part of the premium that are attributable to the required 25% rapid cash buildup factor, pursuant to as permitted by Section 215.555(5)(b), F.S., may be used to pay for losses attributable to prior Contract Years. Pursuant to Section 215.555(6)(a)1., F.S., Reimbursement Premiums, and earnings thereon or amounts collected as part of the premium that are attributable to the rapid cash buildup factor, may be used for payments relating to tax-exempt post-event revenue bonds in the event Emergency Assessments are insufficient. If Reimbursement Premiums are used for debt service on tax-exempt post-event revenue bonds, then the amount of the Reimbursement Premiums, or earnings thereon, or amounts collected as part of the premium that are attributable to the rapid cash buildup factor so used shall be returned, without interest, to the Fund when Emergency Assessments or other legally available funds remain available after making payments relating to such the revenue bonds and any other purposes for which Emergency Assessments were levied.

7. The language addressing federal multi-peril crop and the words “pursuant to the doctrine of federal pre-emption” which had been new language in the Notice of Proposed Rulemaking, as published, have been stricken. This paragraph now reads as follows:

(5)(b) Pursuant to the Order issued by the Office of Insurance Regulation levying the Emergency Assessment, each Assessable Insurer shall remit to the entity identified in the Order, an amount equal to the required percentage of its direct written premium for the preceding calendar quarter from all Assessable Lines. Medical malpractice is an Assessable Line of business but only as to covered events occurring on or after June 1, 2010 2007. In addition, Multi-Peril crop policies reinsured or subsidized by the Federal Government are exempt from the Emergency Assessment pursuant to a final judgment entered on March 20, 2007, in National Crop Insurance Services, Inc. et al. v. Office of Insurance Regulation, Case No. 2006 CA 2594 (Fla. 2nd Cir. Ct. 2007) and pursuant to the doctrine of federal pre-emption, policies issued as part of the National Flood Insurance Program are not subject to the Emergency Assessment pursuant to the doctrine of federal pre-emption. The required percentage will be determined in accordance with Section 215.555(6)(b), F.S., and the procedures set out in subsection (4) of this rule.

Specific Authority 215.555(3) FS. Law Implemented 215.555(2), (3), (4), (5), (6), (7) FS. History–New 9-18-97, Amended 12-3-98, 9-12-00, 6-1-03, 5-19-04, 5-29-05, 5-10-06, 9-5-06,_______.

 

8. The language addressing federal multi-peril crop in (5)(d)2.c., which had been proposed to be added to the rule have been removed.

19-8.029 Insurer Reporting Requirements.

9. Rule 19-8.029, F.A.C. has not changed; however, the Data Call, FHCF-D1A, which is incorporated into Rule 19-8.029, F.A.C. has been amended. As noticed in the Notice of Proposed Rulemaking, the Data Call had provided that Year Built, Florida Building Code Indicator, Structure Opening Protection, Roof Shape, Roof-Wall Connection, and Roof-Deck Attachment would be new rating factors for the 2008-2009 Contract Year. The Data Call has now been amended to show the factors listed above as information only fields and not rating factors.

The person to be contacted regarding these changes is Tracy L. Allen, [phone], P. O. Box 13300, Tallahassee, FL 32317