Insurance Capital Build-Up Incentive Program

 

STATE BOARD OF ADMINISTRATION
Departmental

RULE NO: RULE TITLE
19-15.001: Insurance Capital Build-Up Incentive Program

NOTICE OF CHANGE

INCORPORATED FORMS TO BE CHANGED

Insurance Capital Build-Up Incentive Program Surplus Note, Form SBA 15-2.

State Board of Administration of Florida Insurance Capital Build-Up Incentive Program Quarterly Net Written Premium Report, Form SBA 15-3.

NOTICE IS HEREBY GIVEN by the State Board of Administration of Florida that the wording of paragraphs (3)(k), (4), (6), (8) and (9) of Rule 19-15.001, F.A.C., have changed from the Notice of Proposed Rulemaking published in the June 30, 2006 edition of the Florida Administrative Weekly, Vol. 32, No. 26.

Paragraph (3)(k) has had additional language added to the end. Only the newly added language is underlined below:

(3) Definitions.

(k) “New Capital” must be in the form of Cash or Cash Equivalents and be recorded as additional paid-in capital or new stock issued. New Capital does not include Citizens Property Insurance Corporation take-out bonuses pursuant to Section 627.3511, F.S. A New Capital contribution does not constitute contributions by the Insurer made prior to the Insurer’s application date for the Surplus Note or any other funds contributed to the Insurer’s Surplus which are made for purposes other than in conjunction with the requirements of the Program. New capital may include the initial contribution to surplus for a new insurer if such insurer has been formed in order to participate in the insurance capital build-up incentive program and the capital contribution was made in conjunction with the insurer applying for the surplus note.

Paragraph (4)(g): The last sentence in paragraph (4)(g) has been moved down and renumbered as (4)(h) and what was formerly (4)(h) has been renumbered (4)(i).

Paragraph (6) has been amended to replace the “may” in the third sentence with “shall.” Only the newly added language is underlined below:

....Prioritization shall occur based upon the following criteria:

Paragraph (8)(e) has been added which reads as follows:

(e) A late fee in the amount of 5% of the invoiced amount may be charged if a payment is received five calendar days after the due date except such fee will not be charged if it results from a delay beyond the control of the insurer arising from the Office’s disapproval of the payments or delay in issuing approval of the payment of interest or principal.

Paragraph (9)(a)1. has had additional language added to the end. Only the newly added language is underlined below:

1. Failure to reach the Minimum Writing Ratio within 60 days of an Insurer receiving the proceeds of the Surplus Note distributed by the Board or the failure to maintain the Minimum Writing Ratio once reached unless a supplemental agreement is provided for in the Surplus Note that allows the Insurer more time to reach the Minimum Writing Ratio due to financial considerations.

Paragraph (9)(a)3. has had additional language added to the end. Only the newly added language is underlined below:

3. Failure to maintain the Minimum Required Surplus except for situations involving the payment of losses resulting from a catastrophic event or a series of events resulting in catastrophic losses or where Minimum Required Surplus is reduced as a result of the accounting treatment for deferred acquisition costs.

Incorporated Forms: Insurance Capital Build-Up Incentive Program Surplus Note, Form SBA 15-2. The insurer is required to provide its NAIC number on page 1. Under the Terms and Conditions section, the following changes have been made: Paragraph (2), has been amended to allow insurers for wire transfer payments; a new subparagraph (e) has been added after paragraph (4) to address late fees; and paragraphs (5)(a)1. and 3. have been amended to incorporate changes to the rule, paragraphs (9)(a)1. and 3., as outlined above under the description of changes to the rule. The final change to this form was the addition of a notarization clause following the first attestation signature line so that both attestations would be notarized, not just the second one. The only change to the Quarterly Net Written Premium Report, Form SBA 15-3, was to add the date November 15 to the list of quarterly filings in section V.