4276941, 19ER07-1 - Florida Administrative Rules, Law, Code, Register

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Notice: 4276941

Notice of Emergency Rule

Department:

STATE BOARD OF ADMINISTRATION

Overview

RULE:

19ER07-1

Insurance Capital Build-Up Incentive Program

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

The 2007 Legislature passed HB 1A during the Special Legislative Session in January 2007, effective January 25, 2007, and CS/SB 2498, effective upon becoming law, during the 2007 Regular Legislative Session. This legislation impacts the Insurance Capital Build-Up Incentive Program (Program), which was created by the Legislature in 2006. The purpose of this Program is to increase the availability of residential property insurance covering the risk of hurricanes in Florida and to mitigate premium increases. The State Board of Administration of Florida (Board) is directed to administer the Program. The 2007 Hurricane Season began on June 1, 2007, and the funding for this Program reverts to General Revenue on June 30, 2007; therefore, time is of the essence to implement these new changes to the Program.

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

The Program changes need to be implemented immediately in order to have an impact on the 2007 Hurricane Season. Rulemaking has already begun and a rule workshop notice was published in the May 25, 2007, Florida Administrative Weekly. In addition, the Board has created a place for the Program on its website and updated it with the new legislative changes.

SUMMARY:

CS/SB 2498 expanded the applicability of the Program, as created by HB 1A, by defining the phrase “an insurer writing only manufactured housing policies” as including the following for purposes of the Program: 1. A Florida domiciled insurer that begins writing personal lines residential manufactured housing policies in Florida after March 1, 2007, and that removes a minimum of 50,000 policies from Citizens Property Insurance Corporation without accepting a bonus, provided at least 25 percent of its policies cover manufactured housing. Such an insurer may count any funds above the minimum capital and surplus requirement that were contributed into the insurer after March 1, 2007, as new capital under this statute and 2. A Florida domiciled insurer that writes at least 40 percent of its policies covering manufactured housing in Florida. In addition, HB 1A provided that insurers writing only manufactured housing were eligible for a surplus note of up to $7 million and, for those applying for a surplus note after July 1, 2006, the amount of new capital had to double the amount of the surplus note. Thus, the new capital would be $14 million for a $7 million surplus note if the manufactured housing insurer applied after July 1, 2006. This was changed in CS/SB 2498 passed during the Regular Legislative Session. Now the surplus requirement for an insurer writing only manufactured housing need only be equal to the surplus note. Thus, a $7 million surplus note would require a new capital contribution of $7 million.

THE PERSON TO BE CONTACTED REGARDING THE EMERGENCY RULE IS:

Jack E. Nicholson, Senior FHCF Officer, Florida Hurricane Catastrophe Fund, State Board of Administration, P.O. Box 13300, Tallahassee, FL 32317-3300; telephone (850)413-1340

PRINT PUBLISH DATE:

6/22/2007 Vol. 33/25

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://www.flrules.org/gateway/ruleno.asp?id=19ER07-1&PDate=6/22/2007&Section=4

REFERENCE MATERIALS:

No reference(s).

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