19ER10-1: 19-8.010, Reimbursement Contract
19ER10-2: 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
19ER10-3: 19-8.013, Revenue Bonds Issued Pursuant to Section 215.555(6), F.S.
19ER10-4: 19-8.029, Insurer Reporting Requirements
19ER10-5: 19-8.030, Insurer Responsibilities
SPECIFIC REASONS FOR FINDING AN IMMEDIATE DANGER TO THE PUBLIC HEALTH, SAFETY OR WELFARE: The 2010 Legislature has passed CS/SB 1460, effective April 15, 2010, which changes the contract year for the Florida Hurricane Catastrophe Fund (“Fund”), makes changes to the Fund’s capacity and Insurers’ retentions as well as providing additional Fund reporting requirements. This legislation impacts all of the rules listed above and also impacts some of the forms incorporated into these rules. The 2010 hurricane season begins on June 1, 2010; therefore, time is of the essence in getting the rules and incorporated forms amended and in effect as soon as possible. Emergency Rules are the only way to implement the legislative changes in time for the 2010 hurricane season.
REASON FOR CONCLUDING THAT THE PROCEDURE IS FAIR UNDER THE CIRCUMSTANCES: Hurricane Season begins on June 1st and using the Emergency Rule process is the only way to implement the new legislation by June 1st. The emergency rule was authorized at a published meeting open to the public and is posted to the State Board of Administration’s web site.
SUMMARY: During the 2009 Legislative session the Fund’s Contract Year was changed as follows: The 2010 Contract Year would begin on June 1 and end on December 31st and all years thereafter would begin on January 1 and end on December 31. CS/SB 1460, passed by the 2010 Legislature, changes the Contract Year back to June 1 through May 31st but also adds a new requirement that the annual Reimbursement Contract be adopted each year by February 1st and be executed by the Insurers by March 1st. In addition, CS/SB 1460 freezes the Fund’s capacity and the retention and requires the Fund to publish the Fund’s maximum statutory adjusted capacity for the mandatory coverage for each contract year, the maximum statutory coverage for any optional coverage and the aggregate retention used to calculate an individual insurer’s retention multiples by January 1st of the immediately preceding contract year.
THE PERSON TO BE CONTACTED REGARDING THE EMERGENCY RULE IS: Jack E. Nicholson, Chief Operating Officer, Florida Hurricane Catastrophe Fund, State Board of Administration of Florida
THE FULL TEXT OF THE EMERGENCY RULE IS:
19ER10-1 (19-8.010) Reimbursement Contract.
(1) through (15) No change.
(16) The reimbursement contract for the 2010-2011 contract year, including all Addenda, required by Section 215.555(4), F.S., which is called Form FHCF-2010K-“Reimbursement Contract” or “Contract” between (name of insurer) (the “Company”)/NAIC #( ) and The State Board of Administration of the State of Florida (“SBA”) which administers the Florida Hurricane Catastrophe Fund (“FHCF”), rev. 05/10, as amended, is hereby adopted and incorporated by reference into this rule. This contract is effective from June 1, 2010 through May 31, 2011 December 31, 2010.
Rulemaking Authority 215.555(3) FS. Law Implemented 215.555 FS. History–New 5-31-94, Amended 8-29-95, 5-19-96, 6-19-97, 5-28-98, 5-17-99, 9-13-99, 6-19-00, 6-3-01, 6-2-02, 11-12-02, 5-13-03, 5-19-04, 8-29-04, 5-29-05, 11-13-05, 5-10-06, 9-5-06, 5-8-07, 8-13-07, 6-8-08, 9-2-08, 3-30-09, 8-23-09, 3-30-10, 5-11-10.
19ER10-2 (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.
(1) through (3)(d)1. No change.
2. If the Board determines that the insurer has an aggregate exposure of less than $10 million 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., and that granting the exemption will not adversely affect the actuarial soundness of the Fund, the Board will notify the insurer that its request has been approved and note that the insurer must immediately notify the Board if its exposure becomes $10 million or more in the aggregate. If this occurs, the insurer will be treated as a “new participant” and will be subject to the provisions of subparagraph 19-8.028(4)(c)3., F.A.C., if its exposure becomes $10 million or more during the period from June 1 through November 30 or will be subject to the provisions of subparagraph 19-8.028(4)(c)4., F.A.C., if its exposure becomes $10 million or more during the period from December 1 through May 31 for the contract year for contract years prior to the 2010 contract year, or if its exposure becomes $10 million or more during the period from December 1 through December 31 beginning with the 2010 contract year.
(e) through (g) No change.
Rulemaking 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, 6-8-08, 3-30-09, 3-30-10, 5-11-10.
19ER10-3 (19-8.013) Revenue Bonds Issued Pursuant to Section 215.555(6), F.S.
(1) through (2)(f) No change.
(g) Contract Year, prior to June 1, 2010, means the time period which begins at 12:00:01 Eastern Time on June 1 of each calendar year and ends at 12:00 p.m. midnight on May 31 of the following calendar year. The period of time which begins at 12:00:01 Eastern Time on June 1, 2010 and ends at 12:00 p.m. midnight on December 31, 2010 shall be considered the 2010 Contract Year. All Contract Years beginning after December 31, 2010 shall begin at 12:00:01 Eastern Time on January 1 of each calendar year and end at 12:00 p.m. midnight on December 31 of that calendar year.
(h) through (5)(d) No change.
Rulemaking 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, 6-8-08, 3-30-09, 3-30-10, 5-11-10.
19ER10-4 (19-8.029) Insurer Reporting Requirements.
(1) through (2)(b) No change.
(c) Contract Year, prior to June 1, 2010, means the time period which begins at 12:00:01 Eastern Time on June 1 of each calendar year and ends at 12:00 p.m. midnight on May 31 of the following calendar year. The period of time which begins at 12:00:01 Eastern Time on June 1, 2010 and ends at 12:00 p.m. midnight on December 31, 2010 shall be considered the 2010 Contract Year. All Contract Years beginning after December 31, 2010 shall begin at 12:00:01 Eastern Time on January 1 of each calendar year and end at 12:00 p.m. midnight on December 31 of that calendar year.
(d) through (4)(k) No change.
(l) For the 2010/2011 Contract Year, the reporting shall be in accordance with Form FHCF-D1A, “Florida Hurricane Catastrophe Fund 2010 Data Call,” rev. 05/10, hereby adopted and incorporated by reference into this rule. The form may be obtained from the Fund’s Administrator at the address stated in subsection (6) below. A new participant writing covered policies on or after June 1 but prior to December 1, shall report its actual exposure as of December 31 of the Contract Year on or before March 1 of the Contract Year following calendar year, to the Administrator.
(5) through (7)(e) No change.
(f) For the 2010/2011 Contract Year, the applicable Interim Loss Report is the “Contract Year 2010 Interim Loss Report, Florida Hurricane Catastrophe Fund (FHCF)”, FHCF-L1A, rev. 05/10, which is hereby adopted and incorporated by reference into this rule. The applicable Proof of Loss Report is the “Contract Year 2010 Proof of Loss Report, Florida Hurricane Catastrophe Fund (FHCF),” FHCF-L1B, rev. 05/10, which is hereby adopted and incorporated by reference into this rule. The forms may be obtained from the Fund’s Administrator at the address stated in subsection (6) above.
(8) No change.
Rulemaking Authority 215.555(3) FS. Law Implemented 215.555(2), (3), (4), (5), (6), (7), (15) FS. History–New 5-17-99, Amended 6-19-00, 6-3-01, 6-2-02, 11-12-02, 5-13-03, 5-19-04, 8-29-04, 5-29-05, 5-10-06, 5-8-07, 6-8-08, 3-30-09, 8-2-09,3-30-10, 5-11-10.
19ER10-5 (19-8.030) Insurer Responsibilities.
(1) through (2)(d) No change.
(e) Contract Year, prior to June 1, 2010, means the time period which begins at 12:00:01 Eastern Time on June 1 of each calendar year and ends at 12:00 p.m. midnight on May 31 of the following calendar year. The period of time which begins at 12:00:01 Eastern Time on June 1, 2010 and ends at 12:00 p.m. midnight on December 31, 2010 shall be considered the 2010 Contract Year. All Contract Years beginning after December 31, 2010 shall begin at 12:00:01 eastern Time on January 1 of each calendar year and end at 12:00 p.m. midnight on December 31 of that calendar year.
(f) through (4)(b) No change.
(c)1. For Contract Years prior to the 2010 Contract Year, New Participants during the period of December 1 through May 31: Those Insurers that first begin writing Covered Policies from December 1 through May 31 of a Contract Year, along with the Insurers described in paragraph (b) immediately above, are New Participants. However, these Insurers shall not complete and submit the Data Call (Form FHCF-D1A) but shall meet all other requirements for New Participants.
2. For Contract Years 2010 and later, New Participants during the period of December 1 through December 31: Those Insurers that first begin writing Covered Policies from December 1 through December 31 of a Contract Year, along with the Insurers described in paragraph (b) above, are New Participants. However, these Insurers shall not complete and submit the Data Call (Form FHCF-D1A) but shall meet all other requirements for New Participants.
(d) through (5)(a) No change.
(b) Current Participants: Each Insurer, with Covered Policies as of June 1 of a Contract Year must participate in the FHCF and must complete and submit the Data Call. The Data Call is incorporated into Rule 19-8.029, F.A.C., and is due, correctly completed, no later than September 1 of the Contract Year.
(c) through (6)(a) No change.
(b) New Participants during the period of June 1 through November 30: Those Insurers that first begin writing Covered Policies from June 1 through November 30 of a Contract Year must submit a payment of $1,000 on or before the date indicated on the invoice. Once a New Participant’s Data Call, which is filed on or before March 1 of the Contract Year, has been reviewed by the Administrator and the company’s actual Reimbursement Premium has been determined on its actual exposure, an invoice with the amount due, if any, will be sent to the Company by the Administrator. Payment, if any amounts are shown as due on the invoice, is due within 30 days from the date on the invoice. In no event will the Premium be less than the $1,000.
1. For Contract Years prior to the 2010 Contract Year, the New Participant’s Data Call is due on or before March 1 of the Contract Year.
2. For Contract Years 2010 and later, the New Participant’s Data Call is due on or before March 1 of the following calendar year.
(c) New Participants during the period of December 1 through May 31:
Those 1. For Contract Years prior to the 2010 Contract Year, those Insurers that first begin writing Covered Policies from December 1 through May 31 of a Contract Year shall pay a $1,000 Premium within 30 days from the date on the invoice sent to the Insurer by the FHCF.
2. For Contract Years 2010 and later, those Insurers that first begin writing Covered Policies from December 1 through December 31 of a Contract Year shall pay a $1,000 Premium within 30 days from the date on the invoice sent to the Insurer by the FHCF.
(d) through (7)(a)7. No change.
8. For the 2010/2011 Contract Year, the applicable exposure examination instructions form is the “Florida Hurricane Catastrophe Fund (FHCF) Exposure Examination – Contract Year 2010 Advance Preparation Instructions,” FHCF-EAP1, rev. 05/10. The applicable loss examination instructions form is the “Florida Hurricane Catastrophe Fund (FHCF) Loss Reimbursement Examination – Contract Year 2010 Advance Preparation Instructions,” FHCF-LAP1, rev. 05/10. These forms are hereby adopted and incorporated by reference into this rule. Copies of these forms may be obtained from the FHCF website, www.sbafla.com/fhcf or by contacting the State Board of Administration. The mailing address is P. O. Box 13300, Tallahassee, Florida 32317-3300. The street address is 1801 Hermitage Blvd., Tallahassee, Florida 32308.
(b) through (8)(d) No change.
(e) For the Contract Year 2010/2011, the applicable “Florida Hurricane Catastrophe Fund Interim Loss Report,” is the FHCF-L1A rev. 05/10 and the applicable “Florida Hurricane Catastrophe Fund Proof of Loss Report,” is the FHCF-L1B rev. 05/10. These forms are hereby adopted and incorporated by reference into this rule.
These forms are hereby adopted and incorporated by reference into this rule and may be obtained from the Fund’s Administrator, Paragon Strategic Solutions Inc., 8200 Tower, 5600 West 83rd Street, Suite 1100, Minneapolis, Minnesota 55437. Companies must submit a detailed claims listing (in a delimited ASCII format) to support the losses reported in the FHCF-L1B, Proof of Loss Report, at the same time it submits its first Proof of Loss Report for a specific Covered Event that qualifies the company for reimbursement under that Covered Event, and should be prepared to supply a detailed claims listing for any subsequent Proof of Loss Report upon request. Refer to Form FHCF-LAP1 for the required file layout. The Proof of Loss Report and the detailed claims listing are required to be sent to the FHCF Administrator, Paragon Strategic Solutions Inc., at the address listed above. If your company submits its Proof of Loss Reports electronically through the FHCF’s Online Claims System at www.sbafla.com/fhcf, the detailed claims listing may be attached to the Company’s submission.
(9) through (12) No change.
Rulemaking Authority 215.555(3) FS. Law Implemented 215.555 FS. History–New 5-13-03, Amended 5-19-04, 5-29-05, 5-10-06, 5-8-07, 8-13-07, 6-8-08, 3-30-09, 3-30-10, 5-11-10.