The Florida Commission on Hurricane Loss Projection Methodology is proposing the following rule in order to implement Section 627.0628, F.S. SUMMARY: Proposed Rule 19-16.001, F.A.C., addresses the composition and duties of the Florida Commission on ...

 

STATE BOARD OF ADMINISTRATION
Departmental

RULE NO: RULE TITLE
19-16.001: Florida Commission on Hurricane Loss Projection Methodology Procedures for adopting findings regarding the accuracy or reliability of hurricane loss projections.
PURPOSE AND EFFECT: The Florida Commission on Hurricane Loss Projection Methodology is proposing the following rule in order to implement Section 627.0628, F.S. SUMMARY: Proposed Rule 19-16.001, F.A.C., addresses the composition and duties of the Florida Commission on Hurricane Loss Projection Methodology (Commission), provides definitions and adopts the 2006 standards and procedures for submission and review of hurricane loss projection models.
SUMMARY: Beginning on March 1, 2007, the Public Model is required by law to come before the Commission. Since it has never come before the Commission, the costs to prepare the Public Model for Commission review is unclear. Other modelers are not required to bring their models to the Commission for review. These modelers have indicated in Commission meetings that it can cost in excess of $500,000 to prepare a model for review by the Commission. Any person who wishes to provide information regarding the statement of estimated regulatory costs or to provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SUMMARY OF ESTIMATED REGULATORY COSTS: Beginning on March 1, 2007, the Public Model is required by law to come before the Commission. Since it has never come before the Commission, the costs to prepare the Public Model for Commission review is unclear. Other modelers are not required to bring their models to the Commission for review. These modelers have indicated in Commission meetings that it can cost in excess of $500,000 to prepare a model for review by the Commission. Any person who wishes to provide information regarding the statement of estimated regulatory costs or to provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 627.0628 FS.
LAW IMPLEMENTED: 627.0628(1)(a), (c), (d), (2)(a), (b), (c), (d), (f), (3)(a), (d) FS.
REGARDLESS OF WHETHER OR NOT REQUESTED, A HEARING WILL BE HELD AT THE TIME, DATE AND PLACE SHOWN BELOW:
TIME AND DATE: September 26, 2006, 9:00 a.m. – Noon (ET).
PLACE: Room 116 (Hermitage Conference Room), 1801 Hermitage Blvd., Tallahassee, FL 32308
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Tracy L. Allen, Attorney for the Florida Commission on Hurricane Loss Projection Methodology, State Board of Administration, P.O. Box 13300, Tallahassee, FL 32317-3300; telephone [phone]
Any person requiring special accommodations to participate in this proceeding is asked to advise Donna Sirmons at least five (5) calendar days before such proceeding. Donna Sirmons may be reached by telephone at [phone] or by mail at P.O. Box 13300, Tallahassee, FL 32317-3300

THE FULL TEXT OF THE PROPOSED RULE IS:

19-16.001 Florida Commission on Hurricane Loss Projection Methodology.

(1) Authority and Duties. The Florida Commission on Hurricane Loss Projection Methodology (Commission) was created pursuant to Section 627.0628, F.S.

(a) The Commission is administratively housed within the State Board of Administration of Florida, but is required to independently exercise its statutory powers and duties.

(b) The Trustees of the State Board of Administration of Florida are required to annually appoint a Commission member to serve as Chair.

(c) The State Board of Administration, as a cost of administering the Florida Hurricane Catastrophe Fund, is required to provide for travel, expenses, and staff support for the Commission.

(d) The Commission members serve as a panel of experts in order to provide the most actuarially sophisticated guidelines and standards possible for the projection of hurricane losses given the current state of actuarial science. Such guidelines and standards are to be subject to continuous review and revised at least annually.

(e) The Commission is required from time to time to adopt findings as to the accuracy or reliability of particular methods, principles, standards, models, or output ranges.

(f) The Commission is required to consider any actuarial methods, principles, standards, models, or output ranges that have the potential for improving the accuracy of or reliability of the hurricane loss projections used in residential property insurance rate filings.

(2) Definitions.

(a) “Board” means the State Board of Administration of Florida.

(b) “Commission” means the Florida Commission on Hurricane Loss Projection Methodology.

(c) “FHCF” means the Florida Hurricane Catastrophe Fund.

(d) “Office” means the Office of Insurance Regulation, which was created in Section 20.121(3), F.S.

(e) “Report of Activities” or “Commission’s Report of Activities” or “the Report of Activities of the Commission” or “Florida Commission on Hurricane Loss Projection Methodology Report of Activities” means the document of the Commission adopted annually, which revises and/or updates the Commission’s standards and procedures for the purpose of specifying to the various entities what is necessary for the submission and review of a loss projection model or other loss projection methodology.

(3) Composition of Commission.

(a) The Commission shall consist of the following eleven members:

1. The insurance consumer advocate;

2. The senior employee of the State Board of Administration responsible for operations of the Florida Hurricane Catastrophe Fund;

3. The Executive Director of the Citizens Property Insurance Corporation;

4. The Director of the Division of Emergency Management of the Department of Community Affairs;

5. The actuary member of the Florida Hurricane Catastrophe Fund Advisory Council;

6. An employee of the Office who is an actuary responsible for property insurance rate filings and who is appointed by the director of the Office;

7. An actuary who is employed full time by a property and casualty insurer which was responsible for at least 1 percent of the aggregate statewide direct written premium for homeowner’s insurance in the calendar year preceding the member’s appointment to the Commission;

8. An expert in insurance finance who is a full time member of the faculty of the State University System and who has a background in actuarial science;

9. An expert in statistics who is a full time member of the faculty of the State University System and who has a background in insurance;

10. An expert in computer system design who is a full time member of the faculty of the State University System;

11. An expert in meteorology who is a full time member of the faculty of the State University System and who specializes in hurricanes.

(b) Members listed in subparagraphs (a)1. through 5. above, serve on the Commission for as long as the individual holds the position listed. The member appointed by the director of the Office in subparagraph (a)6. above, serves until the end of the term of office of the director who appointed him or her, unless removed earlier for cause. The members listed in subparagraphs (a)7. through (a)11. above, who are appointed by the Chief Financial Officer for the State of Florida, serve until the end of the term of office of the Chief Financial Officer who appointed him or her, unless removed earlier for cause.

(c) Members are not entitled to compensation for their services but shall be reimbursed for per diem and travel expenses as provided in Section 112.061, F.S.

(4) Adoption of a Report of Activities.

(a) The Commission’s Report of Activities shall be revised annually and adopted annually by the Commission members acting in their capacities as a panel of experts.

(b) For calendar year 2007, the Commission adopts Form 16-1, entitled “Florida Commission on Hurricane Loss Projection Methodology Report of Activities as of November 1, 2006” which is hereby adopted and incorporated as a document for the purpose of providing standards and procedures for submission and review of hurricane loss projection models.

Specific Authority 627.0628 FS. Law Implemented 627.0628(1)(a), (c), (d), (2)(a), (b), (c), (d), (f), (3)(a), (d) FS. History–New________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Robert Ricker, Chair, Florida Commission on Hurricane Loss Projection Methodology

NAME OF SUPERVISOR OR PERSON WHO APPROVED THE PROPOSED RULE: The Florida Commission on Hurricane Loss Projection Methodology

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: August 18, 2006

DATE NOTICE OF PROPOSED RULE DEVELOPMENT  PUBLISHED IN FAW: July 7, 2006, Vol. 32, No. 27

NAME OF PERSON ORIGINATING PROPOSED RULE: Robert Ricker, Chair, Florida Commission on Hurricane Loss Projection Methodology
NAME OF SUPERVISOR OR PERSON WHO APPROVED THE PROPOSED RULE: The Florida Commission on Hurricane Loss Projection Methodology
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: August 18, 2006
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: July 7, 2006, Vol. 32, No. 27