Fla. Admin. Code Ann. R. 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) Purpose. The purpose of this rule is to
establish procedures to determine ineligibility for participation in the
Florida Hurricane Catastrophe Fund ("the Fund") and to establish procedures to
determine whether an insurer may be exempted from subsections (4) and (5) of
Section 215.555, F.S., because it has
less than $10 million in aggregate exposure for covered policies.
(2) Procedures to Determine Ineligibility for
Participation in the Fund.
(a) An insurer
must apply for ineligibility from participation in the Fund if it has
surrendered its certificate of authority to write insurance in Florida. To
apply, the insurer shall submit a written request for ineligibility stating
that it will have no covered policies, as that term is defined in Section
215.555(2)(c),
F.S., after May 31 of the year for which the ineligibility is sought and
provide a copy of the Office of Insurance Regulation Order, if any, revoking
the insurer's authority to write insurance in Florida. The request shall be
sent to the Fund's Administrator, Paragon Strategic Solutions Inc., at 8200
Tower, 5600 West 83rd Street, Suite 1100, Minneapolis, MN 55437.
(b) An insurer which is not surrendering its
certificate to write insurance in Florida must apply for ineligibility from
participation in the Fund if it no longer has any covered policies in force, as
that term is defined in Section
215.555(2)(c),
F.S. To apply, the insurer shall submit a written request for a determination
regarding its ineligibility for participation. The request shall be sent, no
later than September 1 of the current contract year, to the Fund's
Administrator, Paragon Strategic Solutions Inc., at 8200 Tower, 5600 West 83rd
Street, Suite 1100, Minneapolis, MN 55437, and shall contain the following
information:
1. A detailed explanation of any
premium appearing on the insurer's Florida Exhibit of Premiums and Losses of
the National Association of Insurance Commissioners annual statement for lines
of business which may contain covered policies. These lines are: Fire, Allied
Lines, Homeowners Multiple Peril, Commercial Multiple Peril (non-liability
portion), Inland Marine, Farmowners Multiple Peril.
2. A copy of the insurer's Exhibit of
Premiums and Losses of the annual statement, required by Section
624.424, F.S., and any rules
adopted thereunder, for the State of Florida for the applicable year.
3. Form FHCF-E1, "Statement related to
Covered Policies as defined in Section
215.555(2)(c),
F.S., " rev. 05/08, signed by two executive officers attesting to the fact that
the insurer writes no covered policies. Form FHCF-E1 is hereby adopted and
incorporated by reference into this rule. The form may be obtained from the
Fund's Administrator at the address stated in this
paragraph.
(c) The State
Board of Administration of Florida ("Board") shall review the information
received pursuant to paragraph (a) or (b), above.
1. If the Board determines that the insurer
writes 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 must
therefore participate in the Fund as required by Section
215.555(4)(a),
F.S., the Board will notify the insurer that its request has been denied. All
insurers determined to be participants in the Fund will be required to enter
into a reimbursement contract with the Board and will be subject to all premium
payments and interest thereon, as well as fees for inadequate exposure
data.
2. If the Board determines
that the insurer does not write 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., the Board will
notify the insurer that its request has been approved. This ineligibility
continues until the insurer once again begins writing covered policies. The
insurer must immediately notify the Board if it begins writing covered
policies.
(d) Any Company
granted ineligibility status which fails to execute and return the
reimbursement contract to the Fund within thirty days of writing its first
covered policy following the grant of ineligibility status shall not be
eligible for reimbursement for any covered losses from a covered event
occurring prior to the receipt by the Fund of the executed reimbursement
contract.
(3) Procedures
to Determine Exemption from the Fund Due to Limited Exposure.
(a) A current participant 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 September 1 of the current contract
year.
(b) 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.
(c) The request shall be sent
to the Fund's Administrator, Paragon Strategic Solutions Inc., at 8200 Tower,
5600 West 83rd Street, Suite 1100, Minneapolis, MN 55437. The insurer shall
submit the following information no later than September 1 of the current
contract year:
1. A detailed explanation of
any premium appearing on the insurer's Florida Exhibit of Premiums and Losses
of the National Association of Insurance Commissioners annual statement for
lines of business which may contain covered policies. These lines are: Fire,
Allied Lines, Homeowners Multiple Peril, Commercial Multiple Peril
(non-liability portion), Inland Marine, Farmowners Multiple Peril.
2. A copy of the insurer's Exhibit of
Premiums and Losses of the annual statement, required by Section
624.424, F.S., and any rules
adopted thereunder, for the State of Florida for the applicable year.
3. Form FHCF-E2, "Information regarding De
Minimis FHCF Covered Policies In-force at June 30, ____, " rev. 05/09. Form
FHCF-E2 is hereby adopted and incorporated by reference into this rule. The
form may be obtained from the Fund's Administrator at the address stated in
this paragraph.
4. Form FHCF-E3,
"Statement related to De Minimis Aggregate Exposure for Covered Policies as
defined in Section 215.555(2)(c),
F.S., on behalf of _____, " rev. 05/08, signed by two executive officers
attesting to the fact that the insurer writes no covered policies with an
aggregate exposure of $10 million or more. Form FHCF-E3 rev. 05/08, is hereby
adopted and incorporated by reference into this rule. The form may be obtained
from the Fund's Administrator at the address stated in this
paragraph.
(d) The Board
shall review the information received pursuant to paragraph (c), above.
1. If the Board determines that the insurer
has an aggregate exposure of $10 million or more 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 must
therefore participate in the Fund as required by Section
215.555(4)(a),
F.S., because it does not qualify for the exemption permitted by Section
215.555(3),
F.S., the Board will notify the insurer that its request has been denied. All
insurers determined to be participants in the Fund will be required to enter
into a reimbursement contract with the Board and will be subject to all premium
payments and interest thereon, as well as fees for inadequate exposure
data.
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.
(e) The exemption for minimal exposure
permitted by Section 215.555(3),
F.S., is optional for the insurer but, once the exemption is requested, cannot
be withdrawn by the insurer. An insurer with less than $10 million in aggregate
exposure for covered policies is not required to ask for an exemption from the
Fund. Such an insurer may continue to participate in the Fund if it so desires.
An insurer which has been granted an exemption from the Fund may request to be
reinstated in the Fund as a participating member. However, such a request must
be made prior to June 1 of a contract year. No insurer which has been granted
an exemption under this subsection shall be reinstated during the Atlantic
Hurricane Season, which begins June 1 and ends November 30 of each year, so
long as its aggregate exposure remains below $10 million.
(f) The exemptions for minimal exposure
permitted by Section 215.555(3),
F.S., shall not be granted by the Board if the aggregate number of anticipated
exemptions adversely affects the actuarial soundness of the Fund.
(g) Any Company granted de minimis exempt
status which fails to execute and return the reimbursement contract to the Fund
within thirty days of writing a covered policy that results in the insurers
aggregate covered exposure exceeding $10 million dollars shall not be eligible
for reimbursement for any covered losses occurring from a covered event prior
to the receipt by the Fund of the executed reimbursement
contract.
Notes
Rulemaking Authority 215.555(3) FS. Law Implemented 215.555(2)(c), (3), (4), (5) FS.
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, 3-29-10, 8-8-10.
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