9945815, 19ER11-1 - Florida Administrative Rules, Law, Code, Register

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Notice: 9945815

Notice of Emergency Rule

Department:

STATE BOARD OF ADMINISTRATION

Overview

RULE:

19ER11-1

Extraordinary Circumstances for Alternative Method of Finalizing 2005 Losses

SPECIFIC REASONS FOR FINDING AN IMMEDIATE DANGER TO THE PUBLIC HEALTH, SAFETY OR WELFARE:

Pursuant to Paragraph (3)(d), Article X, of the 2005 Florida Hurricane Catastrophe Fund (“FHCF”) Reimbursement Contract, the process of finalizing participating insurers’ losses must begin no later than June 1, 2011. This process involves a valuation of claims that an insurer has received but has not yet paid (“outstanding losses”) and claims that an insurer anticipates but has not yet received (“incurred but not reported losses”). In most circumstances, these losses represent a small portion of an insurer’s recoveries under the Reimbursement Contract. The FHCF is concerned that some participating insurers may have very large amounts of outstanding losses and incurred but not reported losses, as a result of claims that were filed or reopened many years after the hurricanes covered by the 2005 Reimbursement Contract. The size of these losses raises the possibility that the process for finalizing losses may understate their value, resulting in disruption of the property insurance market in Florida, or may overstate their value, resulting in the need for additional bonding on behalf of the FHCF. Both of these potential outcomes endanger the public welfare. The FHCF has determined that alternative methods of finalizing these losses may significantly reduce the likelihood of either overpayment or underpayment, and will therefore protect the public welfare.

REASON FOR CONCLUDING THAT THE PROCEDURE IS FAIR UNDER THE CIRCUMSTANCES:

This emergency rule is a benefit for the public at large, participating insurers, and the FHCF. There is no benefit to any of these parties to have payments to insurers by the FHCF be inadequate or excessive. Further, this emergency rule is posted to the State Board of Administration’s website.

SUMMARY:

This emergency rule provides authority for participating insurers and the SBA or the FHCF to apply flexibility to the timing requirements for settling the 2005 claims and losses.

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, Tallahassee, Florida

PRINT PUBLISH DATE:

5/27/2011 Vol. 37/21

OVERSIGHT COMMITTEE:

Joint Administrative Procedures Committee
Florida Administrative Law Central Online Network (F.A.L.C.O.N.)

RELATED COURT CASES:

Division of Administrative Hearings

FEDERAL eRULEMAKING
WEB PORTAL:

Regulations.gov

HOW TO LINK TO
THIS NOTICE:

http://flrules.org/gateway/ruleno.asp?id=19ER11-1&PDate=5/27/2011&Section=4

REFERENCE MATERIALS:

No reference(s).

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