Exh 10.10
REIMBURSEMENT CONTRACT
EFFECTIVE: JUNE 1, 2006
(CONTRACT)
between
LIBERTY AMERICAN SELECT INSURANCE COMPANY
PINELLAS PARK, FL
(Company)
XXXX # 00000
and
THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA)
WHICH ADMINISTERS THE FLORIDA HURRICANE CATASTROPHE FUND (FHCF)
PREAMBLE
The Legislature of the State of Florida has enacted Section 215.555, Florida
Statutes "Statute", which directs the SBA to administer the FHCF. This Contract
is subject to the Statute and to any administrative rule adopted pursuant
thereto, and is not intended to be in conflict therewith.
In consideration of the promises set forth in this Contract, the parties agree
as follows:
ARTICLE I - SCOPE OF AGREEMENT
As a condition precedent to the SBA's obligations under this Contract, the
Company, an Authorized Insurer or an entity writing Covered Policies under
Section 627.351, Florida Statutes, in the State of Florida, shall report to the
SBA in a specified format the business it writes which is described in this
Contract as Covered Policies.
The terms of this Contract shall determine the rights and obligations of the
parties. This Contract provides reimbursement to the Company under certain
circumstances, as described herein, and does not provide or extend insurance or
reinsurance coverage to any person, firm, corporation or other entity. The SBA
shall reimburse the Company for its Ultimate Net Loss on Covered Policies in
excess of the Company's Retention as a result of each Loss Occurrence commencing
during the Contract Year, to the extent funds are available, all as hereinafter
defined.
FHCF-2006K
Rule 19-8.010 F.A.C.
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ARTICLE II - PARTIES TO THE CONTRACT
This Contract is solely between the Company and the SBA which administers the
FHCF. In no instance shall any insured of the Company or any claimant against an
insured of the Company, or any other third party, have any rights under this
Contract, except as provided in Article XIV. The SBA will only disburse funds to
the Company, except as provided for in Article XIV of this Contract.
ARTICLE III - TERM
This Contract shall apply to Loss Occurrences which commence during the period
from 12:01 a.m., Eastern Time, June 1, 2006, to 12:01 a.m., Eastern Time, June
1, 2007 (Contract Year).
The Company must designate a coverage level, make the required selections, and
return this fully executed Contract (two originals) to the FHCF Administrator so
that the Contract is received by the FHCF Administrator no later than 5 p.m.,
Central Time, June 1, 2006. Failure to do so may result in a referral to the
Office of Insurance Regulation within the Department of Financial Services for
administrative action. Furthermore, the Company's coverage level under this
Contract will be deemed as follows:
(1) For Companies that are a member of a National Association of Insurance
Commissioners (NAIC) group, the same coverage level selected by the other
Companies of the same NAIC group shall be deemed. If executed Contracts for
none of the members of an NAIC group have been received by the FHCF
Administrator, the coverage level from the prior Contract Year shall be
deemed.
(2) For Companies that are not a member of an NAIC group under which other
Companies are active participants in the FHCF, the coverage level from the
prior Contract Year shall be deemed.
(3) For New Participants, as that term is defined in Article V(21), that are a
member of an NAIC group, the same coverage level selected by the other
Companies of the same NAIC group shall be deemed.
(4) For New Participants that are not a member of an NAIC group under which
other Companies are active participants in the FHCF, the 45%, 75% or 90%
coverage levels may be selected providing that the FHCF Administrator
receives executed Contracts within 30 calendar days of the effective date
of the first Covered Policy, otherwise, the 45% coverage level shall be
deemed.
Pursuant to the terms of this Contract, the SBA shall not be liable for Loss
Occurrences which commence after the effective time and date of expiration or
termination. Should this Contract expire or terminate while a Loss Occurrence
covered hereunder is in progress, the SBA shall be responsible for such Loss
Occurrence in progress in the same manner and to the same extent it would have
been responsible had the Contract expired the day following the conclusion of
the Loss Occurrence in progress.
ARTICLE IV - LIABILITY OF THE FHCF
(1) The SBA shall reimburse the Company, with respect to each Loss Occurrence
commencing during the Contract Year for the "Reimbursement Percentage"
elected, this percentage times the amount of Ultimate Net Loss paid by the
Company in excess of the Company's Retention, as adjusted pursuant to
Article V(28), plus 5% of the reimbursed losses for Loss Adjustment Expense
Reimbursement.
(2) The Reimbursement Percentage will be 45% or 75% or 90%, at the Company's
option as elected under Article XVIII.
(3) The aggregate liability of the FHCF with respect to all Reimbursement
Contracts covering this contract year shall not exceed the limit set forth
under Section 215.555(4)(c)1., Florida Statutes. For specifics regarding
loss reimbursement calculations, see section (3)(c) of Article X herein.
(4) Reimbursement amounts shall not be reduced by reinsurance paid or payable
to the Company from other sources.
FHCF-2006K
Rule 19-8.010 F.A.C.
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(5) After the end of the calendar year, the SBA shall notify insurers of the
estimated Borrowing Capacity and the Balance of the Fund as of December 31.
In May and October of each year, the SBA shall publish in the Florida
Administrative Weekly a statement of the FHCF's estimated Borrowing
Capacity and the projected Balance of the Fund as of December 31.
(6) The obligation of the SBA with respect to all Contracts covering a
particular Contract Year shall not exceed the Balance of the Fund as of
December 31 of that Contract Year, together with the maximum amount the SBA
is able to raise through the issuance of revenue bonds or other means
available to the SBA under Section 215.555, Florida Statutes, up to the
limit in accordance with Section 215.555(4)(c)1., Florida Statutes. The
obligations and the liability of the SBA are more fully described in Rule
19-8.013, Florida Administrative Code (F.A.C.). If Reimbursement Premiums,
earnings thereon, or amounts collected as part of the premium that are
attributable to the rapid cash buildup factor are used for debt service in
the event of a temporary shortfall in the collection of emergency
assessments, then the amount of the Premiums, earnings thereon, or amounts
collected as part of the premium that are attributable to the rapid cash
buildup factor so used will be reimbursed to the SBA without interest when
sufficient emergency assessments are received.
ARTICLE V - DEFINITIONS
(1) ACTUAL CLAIMS-PAYING CAPACITY OF THE FHCF
This term means the sum of the Balance of the Fund as of December 31 of a
Contract Year, plus any reinsurance purchased by the FHCF, plus the amount
the SBA is able to raise through the issuance of revenue bonds up to the
limit in accordance with Section 215.555(4)(c)1. and (6), Florida Statutes.
(2) ACTUARIALLY INDICATED
This term means, with respect to Premiums paid by Companies for
reimbursement provided by the FHCF, an amount determined in accordance with
the definition provided in Section 215.555(2)(a), Florida Statutes.
(3) ADDITIONAL LIVING EXPENSE (ALE)
ALE losses covered by the FHCF are not to exceed 40 percent of the insured
value of a Residential Structure or its contents based on the coverage
provided in the policy. Fair rental value, loss of use, loss of rents, or
business interruption losses are not covered by the FHCF.
(4) ADMINISTRATOR
This term means the entity with which the SBA contracts to perform
administrative tasks associated with the operations of the FHCF. The
Administrator is Paragon Strategic Solutions Inc., 0000 Xxxxxxxx Xxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000. The telephone number is
(000) 000-0000, and the facsimile number is (000) 000-0000.
(5) AUTHORIZED INSURER
This term is defined in Section 624.09(1), Florida Statutes.
(6) BORROWING CAPACITY
This term means the amount of funds which are able to be raised by the
issuance of revenue bonds or through other financing mechanisms, less bond
issuance expenses and reserves.
(7) CITIZENS PROPERTY INSURANCE CORPORATION (CITIZENS)
This term means the entity formed under Section 627.351(6), Florida
Statutes and refers to both Citizens Property Insurance Corporation High
Risk Account and Citizens Property Insurance Corporation Personal Lines and
Commercial Lines Accounts.
(8) CONTRACT
This term means this Reimbursement Contract for the current Contract Year.
(9) COVERED EVENT
This term means any one storm declared to be a hurricane by the National
Hurricane Center, which causes insured losses in Florida, both while it is
still a hurricane and throughout any subsequent
FHCF-2006K
Rule 19-8.010 F.A.C.
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downgrades in storm status by the National Hurricane Center. Any storm,
including a tropical storm, which does not become a hurricane is not a
Covered Event.
(10) COVERED POLICY OR COVERED POLICIES
(a) Covered Policy, as defined in Section 215.555(2)(c), Florida Statutes,
is further clarified to mean only that portion of a binder, policy or
contract of insurance that insures real or personal property located
in the State of Florida to the extent such policy insures a
Residential Structure, as defined in definition (27) herein, or the
contents of a Residential Structure, located in the State of Florida.
(b) Due to the specialized nature of the definition of Covered Policies,
Covered Policies are not limited to only one line of business in the
Company's annual statement required to be filed by Section 624.424,
Florida Statutes. Instead, Covered Policies are found in several lines
of business on the Company's annual statement. Covered Policies will
at a minimum be reported in the Company's statutory annual statement
as:
- Fire
- Allied Lines
- Farmowners Multiple Peril
- Homeowners Multiple Peril
- Commercial Multiple Peril (non liability portion, covering
condominiums and apartments)
- Inland Marine
Note that where particular insurance exposures, e.g. mobile homes, are
reported on an annual statement is not dispositive of whether or not
the exposure is a Covered Policy.
(c) This definition applies only to the first-party property section of a
policy pertaining strictly to the structure, its contents, appurtenant
structures, or ALE coverage.
(d) Covered Policy also includes any collateral protection insurance
policy covering personal residences which protects both the borrower's
and the lender's financial interest, in an amount at least equal to
the coverage for the dwelling in place under the lapsed homeowner's
policy, if such policy can be accurately reported as required in
Section 215.555(5), Florida Statutes. A Company will be deemed to be
able to accurately report data if the required data, as specified in
the Premium Formula adopted in Section 215.555(5), Florida Statutes,
is available.
(e) See Article VI of this Contract for specific exclusions.
(11) DEDUCTIBLE BUY-BACK POLICIES
This term means a specific policy that provides coverage to a policyholder
for some portion of the policyholder's deductible under a policy issued by
another insurer.
(12) ESTIMATED CLAIMS-PAYING CAPACITY OF THE FHCF
This term means the sum of the projected Balance of the Fund as of December
31 of a Contract Year, plus any reinsurance purchased by the FHCF, plus the
most recent estimate of the Borrowing Capacity of the FHCF, determined
pursuant to Section 215.555(4)(c), Florida Statutes.
(13) EXCESS POLICIES
This term, for the purposes of this Contract, means a policy that provides
insurance protection for large commercial property risks that provides a
layer of coverage above a primary layer (which is insured by a different
insurer) that acts much the same as a very large deductible.
(14) FLORIDA DEPARTMENT OF FINANCIAL SERVICES (DEPARTMENT)
This term means the Florida regulatory agency, created pursuant to Section
20.121, Florida Statutes, which is charged with regulating the Florida
insurance market and administering the Florida Insurance Code.
(15) FLORIDA INSURANCE CODE
This term means those chapters identified in Section 624.01, Florida
Statutes, which are designated as the Florida Insurance Code.
FHCF-2006K
Rule 19-8.010 F.A.C.
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(16) FORMULA OR THE PREMIUM FORMULA
This term means the Formula approved by the SBA for the purpose of
determining the Actuarially Indicated Premium to be paid to the FHCF. The
Premium Formula is defined as an approach or methodology which leads to the
creation of premium rates. The resulting rates are therefore incorporated
as part of the Premium Formula.
(17) FUND BALANCE OR BALANCE OF THE FUND AS OF DECEMBER 31
These terms mean the "Net assets: Unrestricted" as indicated on the
unconsolidated FHCF Statement of Net Assets for the then current Contract
Year, to which is added: reported FHCF losses (including Loss Adjustment
Expense) for the then current Contract Year, whether paid or unpaid by
FHCF, as of December 31, and from which is subtracted: any reinsurance
recovered prior to, or recoverable as of, December 31; any obligations paid
or expected to be paid with bonding proceeds or receipts from emergency
assessments; amounts needed for administration for the then current State
of Florida fiscal year which have not been spent and which are not
reflected on the FHCF Statement of Net Assets; and the amount of
undispersed mitigation funds appropriated for the then current State of
Florida fiscal year.
(18) INSURER GROUP
For purposes of the coverage option election in Section 215.555(4)(b),
Florida Statutes, Insurer Group means the group designation assigned by the
National Association of Insurance Commissioners (NAIC) for purposes of
filing consolidated financial statements. A Company is a member of a group
as designated by the NAIC until such Company is assigned another group
designation or is no longer a member of a group recognized by the NAIC.
(19) LOSS OCCURRENCE
This term means the sum of individual insured losses incurred under Covered
Policies resulting from the same Covered Event. "Losses" means direct
incurred losses under Covered Policies and excludes Loss Adjustment
Expenses.
(20) LOSS ADJUSTMENT EXPENSE REIMBURSEMENT
(a) Loss Adjustment Expense Reimbursement shall be 5% of the reimbursed
losses under this Contract as provided in Article IV, pursuant to
Section 215.555(4)(b)1., Florida Statutes.
(b) To the extent that loss reimbursements are limited to the Payout
Multiple applied to each Company, the 5% Loss Adjustment Expense is
included in the total Payout Multiple applied to each Company.
(21) NEW PARTICIPANT(S)
This term means all Companies which begin writing Covered Policies on or
after the beginning of the Contract Year. A Company that removes exposure
from either Citizens entity, as that term is defined in (7) above, pursuant
to an assumption agreement effective on or after June 1 and had written no
other Covered Policies before June 1 is also considered a New Participant.
(22) OFFICE OF INSURANCE REGULATION
This term means that office within the Department of Financial Services and
which was created in Section 20.121(3), Florida Statutes.
(23) PAYOUT MULTIPLE
This term means the multiple as calculated in accordance with Section
215.555(4)(c), Florida Statutes, which is derived by dividing the single
season Claims-Paying Capacity of the FHCF by the total aggregate industry
Reimbursement Premium for the FHCF for the Contract Year billed as of
December 31 of the Contract Year. The final Payout Multiple is determined
once Reimbursement Premiums have been billed as of December 31 and the
amount of bond proceeds has been determined.
(24) PREMIUM
This term means the same as Reimbursement Premium.
(25) PROJECTED PAYOUT MULTIPLE
The Projected Payout Multiple is used to calculate a Company's projected
payout pursuant to Section 215.555(4)(d)2.b., Florida Statutes. The
Projected Payout Multiple is derived by dividing
FHCF-2006K
Rule 19-8.010 F.A.C.
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the estimated single season Claims-Paying Capacity of the FHCF by the
estimated total aggregate industry Reimbursement Premium for the FHCF for
the Contract Year. The Company's Reimbursement Premium as paid to the SBA
for the Contract Year is multiplied by the Projected Payout Multiple to
estimate the Company's coverage from the FHCF for the Contract Year.
(26) REIMBURSEMENT PREMIUM
This term means the Premium determined by multiplying each $1,000 of
insured value reported by the Company in accordance with Section
215.555(5)(b), Florida Statutes, by the rate as derived from the Premium
Formula, as described in Rule 19-8.028, F.A.C.
(27) RESIDENTIAL STRUCTURES
This term means dwelling units used as a home or residence for other than
transient occupancy, as that term is defined in Section 83.43(10), Florida
Statutes. These include the primary structure and appurtenant structures
insured under the same policy and any other structures covered under
endorsements associated with a policy covering a residential structure, the
principal function of which at the time of loss was as a primary or
secondary residence. COVERED RESIDENTIAL STRUCTURES DO NOT INCLUDE any
structures listed under Article VI herein.
(28) RETENTION
The Company's Retention means the amount of hurricane losses under Covered
Policies which must be incurred by the Company before it is eligible for
reimbursement from the FHCF.
(a) When the Company experiences covered losses from one or two Covered
Events during the Contract Year, the Company's full Retention shall be
applied to each of the Covered Events.
(b) When the Company experiences covered losses from more than two Covered
Events during the Contract Year, the Company's full Retention shall be
applied to each of the two Covered Events causing the largest covered
losses for the Company. For each other Covered Event resulting in
covered losses, the Company's Retention shall be reduced to one-third
of its full Retention and applied to all other Covered Events.
1. All reimbursement of covered losses for each Covered Event shall
be based on the Company's full Retention until January 1 of the
Contract Year. Adjustments to reflect a reduction to one-third of
the full Retention shall be made as soon as practicable after
January 1 of the Contract Year provided the Company reports its
losses as specified in this Contract.
2. Adjustments to the Company's Retention shall be based upon its
paid and outstanding losses as reported on the Company's Proof of
Loss Reports but shall not include incurred but not reported
losses. The Company's Proof of Loss Reports shall be used to
determine which Covered Events constitute the Company's two
largest Covered Events, and the reduction to one-third of the
full Retention shall be applied to all other Covered Events for
the Contract Year. After this initial determination, any
subsequent adjustments shall be made by the SBA only if the
quarterly loss reports reveal that loss development patterns have
resulted in a change in the order of Covered Events entitled to
the reduction to one-third of the full Retention.
(c) The Company's full Retention is established in accordance with the
provisions of Section 215.555(2)(e), Florida Statutes, and shall be
determined by multiplying the Retention Multiple by the Company's
Reimbursement Premium for the Contract Year.
(d) Once the Company's limit of coverage has been exhausted, the Company
will not be entitled to further reimbursements. The only exception is
with regard to an entity created pursuant to 627.351(6), F.S. which is
addressed in Article X(3)(c)2.c.
(29) RETENTION MULTIPLE
(a) The Retention Multiple is applied to the Company's Reimbursement
Premium to determine the Company's Retention. The Retention Multiple
for the 2006/2007 Contract Year shall be equal to $4.5 billion,
adjusted based upon the reported exposure for the 2005/2006 Contract
Year to reflect the percentage growth in exposure to the FHCF since
2004, divided by the
FHCF-2006K
Rule 19-8.010 F.A.C.
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estimated total industry Reimbursement Premium at the 90%
reimbursement percentage level for the Contract Year as determined by
the SBA.
(b) The Retention Multiple as determined under (29)(a) above shall be
adjusted to reflect the reimbursement percentage elected by the
Company under this Contract as follows:
1. If the Company elects a 90% reimbursement percentage, the
adjusted Retention Multiple is 100% of the amount determined
under (29)(a) above;
2. If the Company elects a 75% reimbursement percentage, the
adjusted Retention Multiple is 120% of the amount determined
under (29)(a) above; or
3. If the Company elects a 45% reimbursement percentage, the
adjusted Retention Multiple is 200% of the amount determined
under (29)(a) above.
(30) ULTIMATE NET LOSS
(a) This term means all losses of the Company under Covered Policies,
prior to the application of the Company's FHCF Retention, as defined
under (28) above, and reimbursement percentage, and excluding loss
adjustment expense, arising from each Loss Occurrence during the
Contract Year, provided, however, that the Company's loss shall be
determined in accordance with the deductible level written under the
policy sustaining the loss.
(b) Salvages and all other recoveries, excluding reinsurance recoveries,
shall be first deducted from such loss to arrive at the amount of
liability attaching hereunder.
(c) All salvages, recoveries or payments recovered or received subsequent
to a loss settlement under this Contract shall be applied as if
recovered or received prior to the aforesaid settlement and all
necessary adjustments shall be made by the parties hereto.
(d) Nothing in this clause shall be construed to mean that losses under
this Contract are not recoverable until the Company's Ultimate Net
Loss has been ascertained.
(e) The SBA shall be subrogated to the rights of the Company to the extent
of its reimbursement of the Company. The Company agrees to assist and
cooperate with the SBA in all respects as regards such subrogation.
The Company further agrees to undertake such actions as may be
necessary to enforce its rights of salvage and subrogation, and its
rights, if any, against other insurers as respects any claim, loss, or
payment arising out of a Covered Event.
ARTICLE VI - EXCLUSIONS
This Contract does not provide reimbursement for:
(1) Any losses not defined as being within the scope of a Covered Policy.
(2) Any policy which excludes wind or hurricane coverage.
(3) Any Excess Policy or Deductible Buy-Back Policy that requires individual
ratemaking.
(4) Any liability of the Company attributable to losses for fair rental value,
loss of use, loss of rents, or business interruption.
(5) Any collateral protection policy that does not meet the definition of
Covered Policy as defined in Article V(10)(d) herein.
(6) Any reinsurance assumed by the Company.
(7) Any exposure for: hotels, motels, timeshares, or other similar structures
that are rented out daily, weekly, or monthly; homeowner associations, if
no habitational structures are insured under the policy; and shelters,
camps or retreats.
(8) Commercial healthcare facilities and nursing homes; however, a nursing home
which is an integral part of a retirement community consisting primarily of
habitational structures that are not nursing homes will not be subject to
this exclusion.
(9) Any exposure under commercial policies covering only appurtenant structures
or structures that do not function as a habitational structure (e.g. a
policy covering only the pool of an apartment complex).
(10) Personal contents in a commercial storage facility covered under a policy
that covers only those personal contents.
FHCF-2006K
Rule 19-8.010 F.A.C.
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(11) Policies covering only Additional Living Expense.
(12) Any exposure for barns or barns with apartments.
(13) Any exposure for builders risk coverage or new residential structures still
under construction.
(14) Any exposure described as a vacant property under a commercial policy.
(15) Any exposure for recreational vehicles or boats (including boat related
equipment) requiring licensing and written on a separate policy or
endorsement.
(16) Any liability of the Company for extra contractual obligations and excess
of original policy limits liabilities.
(17) Losses in excess of the sum of the Balance of the Fund as of December 31 of
the Contract Year and the amount the SBA is able to raise through the
issuance of revenue bonds or by the use of other financing mechanisms, up
to the limit pursuant to Section 215.555(4)(c), Florida Statutes.
(18) Any liability assumed by the Company from Pools, Associations, and
Syndicates. Exception: Covered Policies assumed from Citizens under the
terms and conditions of an executed assumption agreement between the
Authorized Insurer and Citizens are covered by this Contract.
(19) All liability of the Company arising by contract, operation of law, or
otherwise, from its participation or membership, whether voluntary or
involuntary, in any insolvency fund. "Insolvency fund" includes any
guaranty fund, insolvency fund, plan, pool, association, fund or other
arrangement, howsoever denominated, established or governed, which provides
for any assessment of or payment or assumption by the Company of part or
all of any claim, debt, charge, fee, or other obligation of an insurer, or
its successors or assigns, which has been declared by any competent
authority to be insolvent, or which is otherwise deemed unable to meet any
claim, debt, charge, fee or other obligation in whole or in part.
(20) Any liability of the Company for loss or damage caused by or resulting from
nuclear reaction, nuclear radiation, or radioactive contamination from any
cause, whether direct or indirect, proximate or remote, and regardless of
any other cause or event contributing concurrently or in any other sequence
to the loss.
(21) The FHCF does not provide coverage for water damage which is generally
excluded under property insurance contracts and has been defined to mean
flood, surface water, waves, tidal water, overflow of a body of water,
storm surge, or spray from any of these, whether or not driven by wind.
(22) Specialized Fine Arts Risks as defined in Rule 19-8.028(4)(d), F.A.C.
ARTICLE VII - MANAGEMENT OF CLAIMS AND LOSSES
The Company shall investigate and settle or defend all claims and losses. All
payments of claims or losses by the Company within the terms and limits of the
appropriate coverage parts of Covered Policies shall be binding on the SBA,
subject to the terms of this Contract, including the provisions in Article XIII
relating to inspection of records and examinations.
ARTICLE VIII - LOSS REIMBURSEMENT ADJUSTMENTS
(1) OFFSETS
The SBA reserves the right to offset amounts payable to the SBA from the
Company, including amounts payable under previous Contract Years, against
any reimbursement or advance amounts due and payable to the Company from
the SBA as a result of the liability of the SBA.
(2) REIMBURSEMENT ADJUSTMENTS
Section 215.555(4)(d) and (e), Florida Statutes, provides the SBA with the
right to seek the return of excess loss reimbursements which have been paid
to the Company along with interest thereon. Excess loss reimbursements are
those payments made to the Company by the SBA that are in excess of the
Company's coverage under the Contract Year. Excess loss reimbursements may
result from adjustments to the Projected Payout Multiple or the Payout
Multiple, incorrect exposure (Data Call) submissions or resubmissions,
incorrect calculations of Reimbursement Premiums or Retentions,
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Rule 19-8.010 F.A.C.
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incorrect Proof of Loss Reports, incorrect calculation of reinsurance
recoveries, or subsequent readjustment of policyholder claims, including
subrogation and salvage, or any combination of the foregoing. The Company
will be sent an invoice showing the due date for adjustments along with the
interest due thereon through the due date. The applicable interest rate for
interest credits, and for interest charges for adjustments beyond the
Company's control, will be the average rate earned by the SBA for the FHCF
for the first five months of the Contract Year. The applicable interest
rate for interest charges due to adjustments resulting from incorrect
exposure submissions or Proof of Loss Reports will accrue at this rate plus
5%. Interest will continue to accrue if not paid by the due date.
ARTICLE IX - REIMBURSEMENT PREMIUM
(1) The Company shall, in a timely manner, pay the SBA its Reimbursement
Premium for the Contract Year. The Reimbursement Premium for the Contract
Year shall be calculated in accordance with Section 215.555, Florida
Statutes, with any rules promulgated thereunder, and with Article X(2).
(2) Since the calculation of the Actuarially Indicated Premium assumes that the
Companies will pay their Reimbursement Premiums timely, interest charges
will accrue under the following circumstances. A Company may choose to
estimate its own Premium installments. However, if the Company's estimation
is less than the provisional Premium billed, an interest charge will accrue
on the difference between the estimated Premium and the final Premium. If a
Company estimates its first installment, the Administrator shall xxxx that
estimated Premium as the second installment as well, which will be
considered as an estimate by the Company. No interest will accrue regarding
any provisional Premium if paid as billed by the FHCF's Administrator,
except in the case of an estimated second installment as set forth in this
Article. Also, if a Company makes an estimation that is higher than the
provisional Premium billed but is less than the final Premium, interest
will not accrue. If the Premium payment is not received from a Company when
it is due, an interest charge will accrue on a daily basis until the
payment is received. Interest will also accrue on Premiums resulting from
submissions or resubmissions finalized after December 1 of the Contract
Year. An interest credit will be applied for any Premium which is overpaid
as either an estimate or as a provisional Premium. Interest shall not be
credited past December 1 of the Contract Year. The applicable interest rate
for interest credits will be the average rate earned by the SBA for the
FHCF for the first five months of the Contract Year. The applicable
interest rate for interest charges will accrue at this rate plus 5%.
ARTICLE X - REPORTS AND REMITTANCES
(1) EXPOSURES
(a) If the Company writes Covered Policies before June 1 of the Contract
Year, the Company shall report to the SBA, unless otherwise provided
in Rule 19-8.029, F.A.C., no later than the statutorily required date
of September 1 of the Contract Year, by ZIP Code or other limited
geographical area as specified by the SBA, its insured values under
Covered Policies as of June 30 of the Contract Year as outlined in the
annual reporting of insured values form, FHCF-D1A (Data Call) adopted
for the Contract Year under Rule 19-8.029, F.A.C., and other data or
information in the format specified by the SBA.
(b) If the Company first begins writing Covered Policies on or after June
1 but prior to December 1 of the Contract Year, the Company shall
report to the SBA, no later than March 1 of the Contract Year, by ZIP
Code or other limited geographical area as specified by the SBA, its
insured values under Covered Policies as of December 31 of the
Contract Year as outlined in the Supplemental Instructions for New
Participants section of the Data Call adopted for the Contract Year
under Rule 19-8.029, F.A.C., and other data or information in the
format specified by the SBA.
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Rule 19-8.010 F.A.C.
9
(c) If the Company first begins writing Covered Policies on or after
December 1 but through and including May 31 of the Contract Year, the
Company shall not report its exposure data for the Contract Year to
the SBA.
(d) The requirement that a report is due on a certain date means that the
report shall be in the physical possession of the FHCF's Administrator
in Minneapolis no later than 5 p.m. on the due date. If the applicable
due date is a Saturday, Sunday or legal holiday, then the actual due
date will be the day immediately following the applicable due date
which is not a Saturday, Sunday or legal holiday. For purposes of the
timeliness of the submission, neither the United States Postal Service
postmark nor a postage meter date is in any way determinative. Reports
sent to the SBA in Tallahassee, Florida, will be returned to the
sender. Reports not in the physical possession of the FHCF's
Administrator by 5 p.m., Central Time, on the applicable due date are
late.
(e) Pursuant to the provisions of Section 215.557, Florida Statutes, the
reports of insured values under Covered Policies by ZIP Code submitted
to the SBA pursuant to Section 215.555, Florida Statutes, are
confidential and exempt from the provisions of Section 119.07(1),
Florida Statutes, and Section 24(a), Art. I of the State Constitution.
(2) REIMBURSEMENT PREMIUM
(a) If the Company writes Covered Policies before June 1 of the Contract
Year, the Company shall pay the FHCF its Reimbursement Premium in
installments due on or before August 1, October 1, and December 1 of
the Contract Year in amounts to be determined by the FHCF. However, if
the Company's Reimbursement Premium for the prior Contract Year was
less than $5,000, the Company's full provisional Reimbursement
Premium, in an amount equal to the Reimbursement Premium paid in the
prior year, shall be due in full on or before August 1 of the Contract
Year. The Company will be invoiced for amounts due, if any, beyond the
provisional Reimbursement Premium payment, on or before December 1 of
the Contract Year. In addition, if a company has been placed under
regulatory supervision by a State or control of the Company has been
transferred through any legal or regulatory proceeding to a state
regulator or court appointed receiver or rehabilitator (referred to in
the aggregate as "State action"), the full annual provisional
Reimbursement Premium as billed and any outstanding balances will be
due on August 1, or the date that such State action occurs after
August 1 of the Contract Year.
(b) A New Participant that first begins writing Covered Policies on or
after June 1 but prior to December 1 of the Contract Year shall pay
the FHCF a provisional Reimbursement Premium of $1,000 upon execution
of this Contract. The Administrator shall calculate the Company's
actual Reimbursement Premium for the period based on its actual
exposure as of December 31 of the Contract Year, as reported on or
before March 1. To recognize that New Participants have limited
exposure during this period, the actual Premium as determined by
processing the Company's exposure data shall then be divided in half,
the provisional Premium shall be credited, and the resulting amount
shall be the total Premium due for the Company for the remainder of
the Contract Year. However, if that amount is less than $1,000, then
the Company shall pay $1,000. The Premium payment is due no later than
May 1 of the Contract Year. The Company's Retention and coverage will
be determined based on the total Premium due as calculated above.
(c) A New Participant that first begins writing Covered Policies on or
after December 1 but through and including May 31 of the Contract Year
shall pay the FHCF a Reimbursement Premium of $1,000 upon execution of
this Contract.
(d) The requirement that the Reimbursement Premium is due on a certain
date means that the Premium shall be in the physical possession of the
FHCF no later than 5 p.m., Eastern Time, on the due date applicable to
the particular installment. If remitted by check to the FHCF's Post
Office Box, the check shall be physically in the Xxxx Xxxxxx Xxx
000000, Xxxxx, XX 00000-0000, as set out on the invoice sent to the
Company. If remitted by check by hand delivery, the check shall be
physically on the premises of the FHCF's bank in Tampa, Florida, as
set out on
FHCF-2006K
Rule 19-8.010 F.A.C.
10
the invoice sent to the Company. If remitted electronically, the wire
transfer shall have been completed to the FHCF's account at its bank
in Tampa, Florida, as set out on the invoice sent to the Company. If
the applicable due date is a Saturday, Sunday or legal holiday, then
the actual due date will be the day immediately following the
applicable due date which is not a Saturday, Sunday or legal holiday.
For purposes of the timeliness of the remittance, neither the United
States Postal Service postmark nor a postage meter date is in any way
determinative. Premium checks sent to the SBA in Tallahassee, Florida,
or to the FHCF's Administrator in Minneapolis, Minnesota, will be
returned to the sender. Reimbursement Premiums not in the physical
possession of the FHCF by 5 p.m., Eastern Time, on the applicable due
date are late.
(e) Except as required by Section 215.555(7)(c), Florida Statutes, or as
described in the following sentence, Reimbursement Premiums, together
with earnings thereon, received in a given Contract Year will be used
only to pay for losses attributable to Covered Events occurring in
that Contract Year or for losses attributable to Covered Events in
subsequent Contract Years and will not be used to pay for losses in
prior years or for debt service on revenue bonds. Amounts collected as
part of the premium that are attributable to the rapid cash buildup
factor, as permitted by Section 215.555(5)(b), Florida Statutes may be
used to pay for losses attributable to prior years. Pursuant to
Section 215.555(6)(a)1., Florida Statutes, Premiums, earnings thereon,
and amounts collected as part of the premium that are attributable to
rapid cash buildup may be used for payments relating to revenue bonds
in the event Emergency Assessments are insufficient. If Premiums,
earnings thereon, or amounts collected as part of the premium that are
attributable to rapid cash buildup are used for debt service, then the
amount of the Premiums, earnings thereon, or amounts collected as part
of the premium that are attributable to rapid cash buildup so used
shall be returned, without interest, to the Fund when Emergency
Assessments remain available after making payment relating to the
revenue bonds and any other purposes for which Emergency Assessments
were levied.
(3) CLAIMS AND LOSSES
(a) IN GENERAL
1. Claims and losses resulting from Loss Occurrences commencing
during the Contract Year shall be reported by the Company and
reimbursed by the FHCF as provided herein and in accordance with
the Statute, this Contract, and any rules adopted pursuant to the
Statute. For a Company participating in a quota share primary
insurance agreement(s) with Citizens Property Insurance
Corporation High Risk Account, Citizens and the Company shall
report only their respective portion of losses under the quota
share primary insurance agreement(s). Pursuant to Section
215.555(4)(c), Florida Statutes, the SBA is obligated to pay for
losses not to exceed the Actual Claims-Paying Capacity of the
FHCF, up to the limit in accordance with Section 215.555(4)(c)1.,
Florida Statutes, for any one Contract Year.
2. If the Company is in non-compliance with Section 215.555, Florida
Statutes for any Contract Year, including deadlines for sending
in Contracts, addendums or attachments to Contracts, Data Call
submissions or resubmissions, loss reports, or in responding to
SBA exam requirements, the SBA reserves the right to withhold
reimbursements or advances until such time the Company becomes
compliant.
(b) LOSS REPORTS
1. At the direction of the SBA, the Company shall report its
projected Ultimate Net Loss from each Loss Occurrence to provide
information to the SBA in determining any potential liability for
possible reimbursable losses under the Contract on the Interim
Loss Report, Form FHCF-L1A, as adopted in Rule 19-8.029, F.A.C.
Interim Loss Reports (including subsequent Interim Loss Reports
if required by the SBA) will be due in no less than fourteen days
from the date of the notice from the SBA that such a report is
required.
2. FHCF loss reimbursements will be issued based on Ultimate Net
Loss information reported by the Company on the Proof of Loss
Report, Form FHCF-L1B, as adopted in Rule 19-8.029, F.A.C. To
qualify for reimbursement, the Proof of Loss Report must have the
FHCF-2006K
Rule 19-8.010 F.A.C.
11
original signatures of two executive officers authorized
by the Company to sign the report. While a Company may submit a
Proof of Loss Report requesting reimbursement at any time
following a Loss Occurrence, all Companies shall submit a
mandatory Proof of Loss Report for each Loss Occurrence no
earlier than December 1 and no later than December 31 of the
Contract Year during which the Covered Event(s) occurs using the
most current data available, regardless of the amount of Ultimate
Net Loss or the amount of loss reimbursements or advances already
received. Reports may be faxed only if the Company does not
qualify for a reimbursement.
3. Quarterly thereafter until all claims and losses resulting from a
Loss Occurrence are fully discharged or the Company has received
its full coverage under the Contract Year in which the Loss
Occurrence(s) occurred, the Company shall submit updated Proof of
Loss Reports for each Loss Occurrence, as applicable. If the
Company's Retention must be recalculated as the result of an
exposure resubmission, and if the recalculated Retention changes
the FHCF's reimbursement obligations, then the Company shall
submit additional Proof of Loss Reports for recalculation of the
FHCF's obligations.
4. Annually thereafter, all Companies shall submit a mandatory
year-end Proof of Loss Report for each Loss Occurrence, as
applicable, using the most current data available. This Proof of
Loss Report shall be filed no earlier than December 1 and no
later than December 31 of each year and shall continue until the
earlier of the expiration of the commutation period described in
(3)(d) below or until all claims and losses resulting from the
Loss Occurrence are fully discharged including any adjustments to
such losses due to salvage or other recoveries.
5. The SBA, except as noted below, will determine and pay, within 30
days or as soon as practicable after receiving Proof of Loss
Reports, the reimbursement amount due based on losses paid by the
Company to date and adjustments to this amount based on
subsequent quarterly information. The adjustments to
reimbursement amounts shall require the SBA to pay, or the
Company to return, amounts reflecting the most recent
determination of losses. The FHCF shall have the right to conduct
a claims examination prior to the issuance of any advances or
reimbursements submitted by Companies that have been placed under
regulatory supervision by a State or where control has been
transferred through any legal or regulatory proceeding to a state
regulator or court appointed receiver or rehabilitator.
6. If a Covered Event occurs during the Contract Year, but after
December 31, at the direction of the SBA, Companies shall file an
Interim Loss Report within 30 days after the Covered Event and
Proof of Loss Reports quarterly thereafter. Subparagraphs 2-5
above regarding Proof of Loss Reports shall apply.
7. All Proof of Loss Reports received will be compared with the
FHCF's exposure data to establish the facial reasonableness of
the reports. The SBA may also review the results of current and
prior Contract Year exposure and loss examinations to determine
the reasonableness of the reported losses. Except as noted in
paragraph 4. above, Companies meeting these tests for
reasonableness will be scheduled for reimbursement. Companies not
meeting these tests for reasonableness will be handled on a
case-by-case basis and will be contacted to provide specific
information regarding their individual book of business. The
discovery of errors in a Company's reported exposure under the
Data Call may require a resubmission of the current Contract Year
Data Call which, as the Data Call impacts the Company's premium,
retention, and coverage for the Contract Year, will be required
before the Company's request for reimbursement or an advance will
be fully processed by the Administrator.
(c) LOSS REIMBURSEMENT CALCULATIONS
1. In general, the Company's paid Ultimate Net Losses must exceed
its full FHCF Retention for a specific Covered Event before any
reimbursement is payable from the FHCF for that Covered Event. As
described in Article V(28), Retention adjustments will be made
after
FHCF-2006K
Rule 19-8.010 F.A.C.
12
January 1 of the Contract Year. No interest is payable on
additional payments to the Company due to this type of Retention
adjustment. Each Company sustaining reimbursable losses will
receive the amount of reimbursement due under the Contract up to
the amount of the Company's payout. If more than one Covered
Event occurs in any one Contract Year, any reimbursements due
from the FHCF shall take into account the Company's Retention for
each Covered Event. However, the Company's reimbursements from
the FHCF for all Covered Events occurring during the Contract
Year shall not exceed, in aggregate, the Projected Payout
Multiple or Payout Multiple, as applicable, times the individual
Company's Reimbursement Premium for the Contract Year.
2. In determining reimbursements under this Contract, the SBA shall:
a. First, reimburse Companies qualified as limited
apportionment companies under Section 627.351(2)(b)3.,
Florida Statutes, for the amount (if any) of reimbursement
due under the individual Company's Contract, but not to
exceed the lesser of $10 million or an amount equal to 10
times the individual Company's Reimbursement Premium for the
Contract Year. This provision does not apply if the
projected Balance of the Fund as of December 31 of the
Contract Year, exclusive of any bonding capacity of the
FHCF, exceeds $2 billion. Further, if the Company is a
member of an NAIC group, the Company may not receive
reimbursement under this provision if any other member of
the NAIC group has received reimbursement under this
provision.
b. Next, reimburse each of the Companies for the amount (if
any) of reimbursement due under the individual Company's
Contract, but not to exceed for all Loss Occurrences, an
amount equal to the Projected Payout Multiple or the Payout
Multiple, as applicable, times the individual Company's
Reimbursement Premium for the Contract Year. For a limited
apportionment company, any amount payable under this
provision shall be reduced by the amount (if any) payable
under (a) above.
c. Thereafter, pursuant to Section 215.555(4)(d)2.c., Florida
Statutes, establish the prorated reimbursement level at the
highest level for which any remaining fund balance or bond
proceeds (as limited by Section 215.555(4)(c), Florida
Statutes) are sufficient to reimburse entities created
pursuant to Section 627.351(6), Florida Statutes, for
reimbursable losses exceeding the amounts payable pursuant
to (b) above for the Contract Year. The proration shall be
determined based on each entity's share of their aggregate
reimbursable losses exceeding the amounts payable pursuant
to (b) above. Any additional reimbursements pursuant to this
paragraph shall not include losses under an entity's FHCF
Retention and will be at the 90% Reimbursement Percentage.
In order to determine the amount available for additional
reimbursements, the SBA will review reported loss
information from all Companies and determine that all
Companies which received payments for reimbursable losses
but which did not exceed their projected payout have settled
all, or substantially all, of their claims eligible for
reimbursement. The SBA will then determine the remaining
amount of Claims-Paying Capacity available for such
additional reimbursements.
3. Reserve established. When a Covered Event occurs in a subsequent
Contract Year when reimbursable losses are still being paid for a
Covered Event in a previous Contract Year, the SBA will establish
a reserve for the outstanding reimbursable losses for the
previous Contract Year, based on the length of time the losses
have been outstanding, the amount of losses already paid, the
percentage of incurred losses still unpaid, and any other factors
specific to the loss development of the Covered Events involved.
(d) COMMUTATION
1. Not less than 36 months or more than 60 months after the end of
the Contract Year, the Company shall report to the FHCF all
claims and losses, both reported and unreported, for the Contract
Year which are not finally settled and which may be reimbursable
losses under this Contract. The Company and the SBA or their
respective representatives may, by
FHCF-2006K
Rule 19-8.010 F.A.C.
13
mutual agreement, determine the capitalized value of all claims
and losses, both reported and unreported, resulting from Loss
Occurrences commencing during the Contract Year, and the Company
shall provide the SBA with a copy of a written opinion on such
capitalized value by the Company's certifying actuary. Payment by
the SBA of its portion of any amount or amounts so mutually
agreed and certified by the Company's certifying actuary shall
constitute a complete and final release of the SBA in respect of
all claims and losses, both reported and unreported, under this
Contract.
2. If agreement on capitalized value cannot be reached within 60
days after the Company reports its claims and losses to the FHCF,
the Company and the SBA may mutually appoint an actuary or
appraiser to investigate, determine and capitalize such claims or
losses. If both parties then agree, the SBA shall pay its portion
of the amount so determined to be the capitalized value of such
claims or losses.
3. If the parties fail to agree, then any difference shall be
settled by a panel of three actuaries, one to be chosen by each
party and the third by the two so chosen. If either party does
not appoint an actuary within 30 days, the other party may
appoint two actuaries. If the two actuaries fail to agree on the
selection of a third actuary within 30 days of their appointment,
each of them shall name two, of whom the other shall decline one
and the decision shall be made by drawing lots. All the actuaries
shall be regularly engaged in the valuation of property claims
and losses and shall be members of the Casualty Actuarial Society
and of the American Academy of Actuaries. None of the actuaries
shall be under the control of either party to this Contract. Each
party shall submit its case to its actuary within 30 days of the
appointment of the third actuary. The decision in writing of any
two actuaries, when filed with the parties hereto, shall be final
and binding on both parties.
4. The reasonable and customary expense of the actuaries and of the
commutation (as a result of 2. and 3. above) shall be equally
divided between the two parties. Said commutation shall take
place in Tallahassee, Florida, unless some other place is
mutually agreed upon by the Company and the SBA.
(4) ADVANCES
(a) In accordance with Section 215.555(4)(e), Florida Statutes, the SBA
may make advances for loss reimbursements as defined herein, at market
interest rates, to the Company in accordance with Section
215.555(4)(e), Florida Statutes. An advance is an early reimbursement
which allows the Company to continue to pay claims in a timely manner.
Advances will be made based on the Company's Ultimate Net Loss, on an
incurred basis, as reported on a Proof of Loss Report, and shall
include Loss Adjustment Expense Reimbursement as calculated by the
FHCF. In order to be eligible for an advance, the Company must submit
its exposure data for the Contract Year as required under paragraph
(1) of this Article. Except as noted below, advances, if approved,
will be made as soon as practicable after the SBA receives a written
request, signed by two officers of the Company, for an advance of a
specific amount and any other information required for the specific
type of advance under subparagraphs (c) and (e) below. All
reimbursements due to a Company shall be offset against any amount of
outstanding advances plus the interest due thereon.
(b) For advances or excess advances, which are advances that are in excess
of the amount to which the Company is entitled, the market interest
rate shall be the prime rate as published in the Wall Street Journal
on the first business day of the Contract Year. This rate will be
adjusted annually on the first business day of each subsequent
Contract Year, regardless of whether the Company executes subsequent
Contracts. All interest charged will commence on the date the SBA
issues a check for an advance and will cease on the date upon which
the FHCF has received the Company's Proof of Loss Report(s) for the
Covered Event(s) for which the Company qualifies for reimbursement(s).
If such reimbursement(s) are less than the amount of outstanding
advance(s) issued to the Company, interest will continue to accrue on
the outstanding balance of the advance(s) until subsequent Proof of
Loss Reports qualify the Company for
FHCF-2006K
Rule 19-8.010 F.A.C.
14
reimbursement under any Covered Event equal to or exceeding the amount
of any outstanding advance(s). Interest shall be billed on a periodic
basis. If it is determined that the Company received funds in excess
of those to which it was entitled, the interest as to those sums will
not cease on the date of the receipt of the Proof of Loss Report but
will continue until the Company reimburses the FHCF for the
overpayment.
(c) If the Company has an outstanding advance balance as of December 31 of
this or any other Contract Year, the Company is required to have an
actuary certify outstanding and incurred but not reported losses as
reported on the applicable December Proof of Loss Report.
(d) The specific type of advances enumerated in the Section 215.555,
Florida Statutes, follow.
1. Advances to Companies to prevent insolvency, as defined under
Article XIV of this Contract.
a. Section 215.555(4)(e)1., Florida Statutes, provides that the
SBA shall advance to the Company amounts necessary to
maintain the solvency of the Company, up to 50 percent of
the SBA's estimate of the reimbursement due to the Company.
b. In addition to the requirements outlined in subparagraph
(4)(a) above, the requirements for an advance to a Company
to prevent insolvency are that the Company demonstrates it
is likely to qualify for reimbursement and that the
immediate receipt of moneys from the SBA is likely to
prevent the Company from becoming insolvent, and the Company
provides the following information:
i. Current assets;
ii. Current liabilities other than liabilities due to the
Covered Event;
iii. Current surplus as to policyholders;
iv. Estimate of other expected liabilities not due to the
Covered Event; and
v. Amount of reinsurance available to pay claims for the
Covered Event under other reinsurance treaties.
c. The SBA's final decision regarding an application for an
advance to prevent insolvency shall be based on whether or
not, considering the totality of the circumstances,
including the SBA's obligations to provide reimbursement for
all Covered Events occurring during the Contract Year,
granting an advance is essential to allowing the entity to
continue to pay additional claims for a Covered Event in a
timely manner.
2. Advances to entities created pursuant to Section 627.351(6),
Florida Statutes.
a. Section 215.555(4)(e)2., Florida Statutes, provides that the
SBA may advance to an entity created pursuant to Section
627.351(6), Florida Statutes, up to 90% of the lesser of the
SBA's estimate of the reimbursement due or the entity's
share of the actual aggregate Reimbursement Premium for that
Contract Year, multiplied by the current available liquid
assets of the FHCF.
b. In addition to the requirements outlined in subparagraph
(4)(a) above, the requirements for an advance to entities
created pursuant to Section 627.351(6), Florida Statutes are
that the entity must demonstrate to the SBA that the advance
is essential to allow the entity to pay claims for a Covered
Event.
3. Advances to limited apportionment companies.
Section 215.555(4)(e)3., Florida Statutes, provides that the SBA
may advance the amount of estimated reimbursement payable to
limited apportionment companies.
(e) In determining whether or not to grant an advance and the amount of an
advance, the SBA:
1. Shall determine whether its assets available for the payment of
obligations are sufficient and sufficiently liquid to fulfill its
obligations to other Companies prior to granting an advance;
2. Shall review and consider all the information submitted by such
Companies;
3. Shall review such Companies' compliance with all requirements of
Section 215.555, Florida Statutes;
4. Shall consult with all relevant regulatory agencies to seek all
relevant information;
FHCF-2006K
Rule 19-8.010 F.A.C.
15
5. Shall review the damage caused by the Covered Event and when that
Covered Event occurred; and
6. Shall consider any other factors deemed relevant.
(f) In situations where a Company has been placed under regulatory
supervision by a State, or where control has been transferred through
any legal or regulatory proceeding to a state regulator, court
appointed receiver or rehabilitator, or a state insurance guarantee
association, all requirements of the Company outlined herein shall
remain applicable and must be met prior to the issuance of any advance
of reimbursements for which the Company may be eligible to receive
under the Contract.
(g) Any amount advanced by the SBA shall be used by the Company only to
pay claims of its policyholders for the Covered Event or Covered
Events which have precipitated the immediate need to continue to pay
additional claims as they become due.
(5) DELINQUENT PREMIUM PAYMENTS
Failure to submit a Premium or Premium installment when due is a violation
of the terms of this Contract and Section 215.555, Florida Statutes.
Interest on late payments shall be due as set forth in Article IX(2) of
this Contract.
(6) INADEQUATE DATA SUBMISSIONS
If exposure data or other information required to be reported by the
Company under the terms of this Contract is not received by the FHCF in the
format specified by the FHCF and is inadequate to the extent that the FHCF
requires resubmission of data, the Company will be required to pay the FHCF
a resubmission fee of $1,000. The $1,000 fee is also applicable to exposure
resubmissions made as a result of examinations of the Company's exposure
and claims data. A resubmission of exposure data may delay the processing
of the Company's request for reimbursement or an advance.
(7) DELINQUENT SUBMISSIONS
Failure to submit an exposure submission or resubmission, or loss reports,
when due is a violation of the terms of this Contract and Section 215.555,
Florida Statutes.
ARTICLE XI - TAXES
In consideration of the terms under which this Contract is issued, the Company
agrees to make no deduction in respect of the Premium herein when making premium
tax returns to the appropriate authorities. Should any taxes be levied on the
Company in respect of the Premium herein, the Company agrees to make no claim
upon the SBA for reimbursement in respect of such taxes.
ARTICLE XII - ERRORS AND OMISSIONS
Any inadvertent delay, omission, or error on the part of the SBA shall not be
held to relieve the Company from any liability which would attach to it
hereunder if such delay, omission, or error had not been made.
ARTICLE XIII - INSPECTION OF RECORDS
The Company shall allow the SBA to inspect, examine, and verify, at reasonable
times, all records of the Company relating to the Covered Policies under this
Contract, including Company files concerning claims, losses, or legal
proceedings regarding subrogation or claims recoveries which involve this
Contract, including premium, loss records and reports involving exposure data on
Covered Policies. This right by the SBA to inspect, examine, and verify shall
survive the completion and closure of an exposure examination or loss
examination file and the termination of the Contract. The Company shall have no
right to re-open an exposure or loss reimbursement examination once closed and
the findings have been accepted by the Company; any re-opening shall be at the
sole discretion of the SBA. All discovered errors, inadvertent omissions, and
typographical errors associated with the data reporting of insured values,
discovered prior to the closing of the file and acceptance of the examination
findings by the
FHCF-2006K
Rule 19-8.010 F.A.C.
16
Company, shall be corrected to reflect the proper values. The Company shall
retain its records in accordance with the requirements for records retention
regarding exposure reports and claims reports outlined herein, and in any
administrative rules adopted pursuant to Section 215.555, Florida Statutes.
Companies writing covered collateral protection policies, as defined in
definition (10)(d) of Article V herein, must be able to provide documentation
that the policy covers personal residences, protects both the borrower's and
lender's interest, and that the coverage is in an amount at least equal to the
coverage for the dwelling in place under the lapsed homeowner's policy.
(1) EXAMINATION REQUIREMENTS FOR EXPOSURE VERIFICATION
The Company shall retain complete and accurate records, in policy level
detail, of all exposure data submitted to the SBA in any Contract Year
until the SBA has completed its examination of the Company's exposure
submissions. The Company shall also retain complete and accurate records of
any completed exposure examination for any Contract Year in which the
Company incurred losses until the completion of the loss reimbursement
examination for that Contract Year. The records to be retained shall
include the exam file which supports the exposure reported to the SBA and
any other information which would allow for a complete examination of the
Company's reported exposure data. The exam file shall be prepared according
to the SBA Exam File Specifications outlined in the Data Call. The Company
must also have available, at the time of the examination, a copy of its
underwriting manual, a copy of its rating manual, and staff to respond to
the questions of the SBA or its agents. The Company is also required to
retain declarations pages and policy applications to support reported
exposure. To meet the requirement that the application must be retained,
the Company may retain either the actual application or may retain the
actual application in an electronic format. A complete list of records to
be retained are set forth in Form FHCF-EAP1, adopted in Rule 19-8.030,
F.A.C.
(2) EXAMINATION REQUIREMENTS FOR LOSS REPORTS
The Company shall retain complete and accurate records of all reported
losses and/or advances submitted to the SBA until the SBA has completed its
examination of the Company's reimbursable losses. The records to be
retained are set forth as part of the Proof of Loss Report, Form FHCF-L1B,
adopted in Rule 19-8.029, F.A.C., and Form FHCF-LAP1, adopted in Rule
19-8.030, F.A.C. The Company must also retain the required exposure exam
file for the Contract Year in which the loss occurred, and must have
available any other information which would allow for a complete
examination of the Company's losses.
(3) EXAMINATION PROCEDURES
(a) The FHCF will send an examination notice to the Company providing the
commencement date of the examination, the site of the examination, any
accommodation requirements of the examiner, and the reports and data
which must be assembled by the Company and forwarded to the FHCF upon
request. The Company shall be prepared to choose one location in which
to be examined, unless otherwise specified by the SBA.
(b) The reports and data are required to be forwarded to the FHCF as set
forth in an examination notice letter. The information is then
forwarded to the examiner. If the FHCF receives accurate and complete
records as requested, the examiner will contact the Company to inform
the Company as to what policies or other documentation will be
required once the examiner is on site. Any records not required to be
provided to the examiner in advance shall be made available at the
time the examiner arrives on site.
(c) At the conclusion of the examiner's work and the management review of
the examiner's report, findings, recommendations, and work papers, the
FHCF will forward a preliminary draft of the examination report to the
Company and require a response from the Company by a date certain as
to the examination findings and recommendations.
(d) If the Company accepts the examination findings and recommendations,
and there is no recommendation for resubmission of the Company's
exposure data, the examination report will be finalized and the exam
file closed.
FHCF-2006K
Rule 19-8.010 F.A.C.
17
(e) If the Company disputes the examiner's findings, the areas in dispute
will be resolved by a meeting or a conference call between the Company
and FHCF management.
(f)1. The recommendation of a loss reimbursement examination could require
the Company to resubmit or update its loss reports or exposure data.
2. If the recommendation of the examiner is to resubmit the Company's
exposure data for the Contract Year in question, then the FHCF will
send the Company a letter outlining the process for resubmission and
including a deadline to resubmit. The resubmission will include a data
file to be submitted to the FHCF's Administrator and an exam file to
be submitted to the offices of the SBA. The resubmission is also
required to be accompanied by a detailed written description of the
specific changes made to the resubmitted data. Once the resubmission
is received by the FHCF's Administrator, the FHCF's Administrator
calculates a revised Reimbursement Premium for the Contract Year which
has been examined. The SBA shall then review the resubmission with
respect to the examiner's findings, and accept the resubmission or
contact the Company with any questions regarding the resubmission.
Once the SBA has accepted the resubmission as a sufficient response to
the examiner's findings, the FHCF's Administrator will send the
Company an invoice for any Reimbursement Premium and interest due or
to refund Reimbursement Premium, as the case may be. Once the
resubmission has been approved, the exam file is closed.
3. If the recommendation of the examiner is either to resubmit the
Company's exposure data for the Contract Year in question or giving
the option to pay the estimated Premium difference, then the FHCF will
send the Company a letter outlining the process for resubmission or
for paying the estimated Premium difference and including a deadline
for the resubmission or the payment to be received by the FHCF's
Administrator. If the Company chooses to resubmit, the same procedures
outlined in Article XIII(3)(f)2. apply.
4. If the recommendation of the examiner is to update the Company's Proof
of Loss Report(s) for the Contract Year under review, the FHCF will
send the Company a letter outlining the process for submitting the
Proof of Loss Report(s) and including a deadline to file. The updated
Proof of Loss Report(s) will be submitted to the FHCF's Administrator
with a copy of the Proof of Loss Report(s) and a supporting detailed
claims listing to be submitted to the offices of the SBA. The report
is required to be accompanied by a detailed written description of the
specific changes made. Once the Proof of Loss Report(s) is received by
the FHCF Administrator, the FHCF's Administrator will calculate a
revised reimbursement. The SBA shall then review the submitted Proof
of Loss Report(s) with respect to the examiner's findings, and accept
the Proof of Loss Report(s) as filed or contact the Company with any
questions. Once the SBA has accepted the corrected Proof of Loss
Report(s) as a sufficient response to the examiner's findings, the
FHCF's Administrator will send the Company an invoice for any
overpayments and interest due or the additional reimbursement owed the
Company, as the case may be. Once the Proof of Loss Report(s) is
approved, the exam file is closed.
(g) If the Company continues to dispute the examiner's findings and/or
recommendations and no resolution of the disputed matters is obtained
through discussions between the Company and FHCF management, then the
process within the SBA is at an end and further administrative
remedies may be pursued under Chapter 120, Florida Statutes.
(h) The examiner's list of errors is made available in the examination
report sent to the Company. Given that the examination was based on a
sample of the Company's policies or claims rather than the whole
universe of the Company's Covered Policies or reported claims, the
error list is not intended to provide a complete list of errors but is
intended to indicate what information needs to be reviewed and
corrected throughout the Company's book of Covered Policy business or
claims information to ensure more complete and accurate reporting to
the FHCF.
FHCF-2006K
Rule 19-8.010 F.A.C.
18
(4) COSTS OF THE EXAMINATIONS
The costs of the examinations shall be borne by the SBA. However, in order
to remove any incentive for a Company to delay preparations for an
examination, the SBA shall be reimbursed by the Company for any examination
expenses incurred in addition to the usual and customary costs, which
additional expenses were incurred as a result of the Company's failure,
despite proper notice, to be prepared for the examination or as a result of
a Company's failure to provide requested information. All requested
information must be complete and accurate. The Company shall be notified of
any administrative remedies which may be obtained under Chapter 120,
Florida Statutes.
ARTICLE XIV - INSOLVENCY OF THE COMPANY
Company shall notify the FHCF immediately upon becoming insolvent. Pursuant to
Section 215.555(4)(g), Florida Statutes, the FHCF is required to pay the "net
amount of all reimbursement moneys" due an insolvent insurer to the Florida
Insurance Guaranty Association (FIGA) for the benefit of Florida policyholders.
For the purpose of this Contract, a Company is insolvent when an order of
liquidation with a finding of insolvency has been entered by a court of
competent jurisdiction. In light of the need for an immediate infusion of funds
to enable policyholders of insolvent companies to be paid for their claims, the
SBA may enter into agreements with FIGA allowing exposure and loss examinations
to take place immediately without the usual notice and response time limitations
and allowing the FHCF to make loss reimbursements (net of any amounts payable to
the SBA from the Company or FIGA) to FIGA before the examinations are completed
and before the response time expires for claims filing by reinsurers and
financial institutions, which have a priority interest in those funds pursuant
to Section 215.555(4)(g), Florida Statutes. Such agreements must ensure the
availability of the necessary records and adequate security must be provided so
that if the FHCF determines that it overpaid FIGA on behalf of the Company, or
if claims are filed by reinsurers or financial institutions having a priority
interest in these funds, that the funds will be repaid to the FHCF by FIGA with
in a reasonable time.
ARTICLE XV - TERMINATION
The FHCF and the obligations of both parties under this Contract can be
terminated only as may be provided by law or applicable rules.
ARTICLE XVI - VIOLATIONS
Pursuant to the provisions of Section 215.555(10), Florida Statutes, any
violation of the terms of this Contract by the Company constitutes a violation
of the Insurance Code of the State of the Florida. Pursuant to the provisions of
Section 215.555(11), Florida Statutes, the SBA is authorized to take any action
necessary to enforce any administrative rules adopted pursuant to Section
215.555, Florida Statutes, and the provisions and requirements of this Contract.
ARTICLE XVII - APPLICABLE LAW
(1) APPLICABLE LAW: This Contract shall be governed by and construed according
to the laws of the State of Florida in respect of any matter relating to or
arising out of this Contract.
(2) NOTICE OF RIGHTS: Pursuant to Chapter 120, Florida Statutes, and the
Uniform Rules of Procedure, codified as Chapters 28-101 through 28-111,
F.A.C., a person whose substantial interests are affected by a decision of
the SBA regarding the FHCF may request a hearing within 21 days shall have
waived his or her right to a hearing. The hearing may be a formal hearing
or an informal hearing pursuant to the provisions of Sections 120.569 and
120.57, Florida Statutes. The petition must be filed (received) in the
office of the Agency Clerk, General Counsel's Office, State Board of
Administration of Florida, X.X. Xxx 00000, Xxxxxxxxxxx, XX 00000-0000,
within the 21 day period.
FHCF-2006K
Rule 19-8.010 F.A.C.
19
ARTICLE XVIII - REIMBURSEMENT CONTRACT ELECTIONS
REIMBURSEMENT PERCENTAGE
For purposes of determining reimbursement (if any) due the Company under this
Contract and in accordance with the Statute, the Company has the option to elect
a 45% or 75% or 90% reimbursement percentage under this Contract. If the Company
is a member of an NAIC group, all members must elect the same reimbursement
percentage, and the individual executing this Contract on behalf of the Company,
by placing his or her initials in the box under (a) below, affirms that the
Company has elected the same reimbursement percentage as all members of its NAIC
group. If the Company is an entity created pursuant to Section 627.351, Florida
Statutes, the Company must elect the 90% reimbursement percentage. The Company
shall not be permitted to change its reimbursement percentage during the
Contract Year. The Company shall be permitted to change its reimbursement
percentage at the beginning of a new Contract Year, but may not reduce its
reimbursement percentage if a Covered Event required the issuance of revenue
bonds, until the bonds have been fully repaid.
The Reimbursement Percentage elected by the Company for the prior Contract Year
effective June 1, 2005 was as follows: (Legal_Name) - (M_2005_Coverage_Option)
(a) NAIC GROUP AFFIRMATION: Initial the following box if the Company is part of
an NAIC Group:
(TBM)
(b) REIMBURSEMENT PERCENTAGE ELECTION: The Company hereby elects the following
Reimbursement Percentage for the Contract Year from 12:01 a.m., Eastern
Time, June 1, 2006, to 12:01 a.m., Eastern Time, June 1, 2007, (the
individual executing this Contract on behalf of the Company shall place his
or her initials in the box to the left of the percentage elected for the
Company):
(BOX) 45% OR (BOX) 75% OR (TBM) 90%
REPORTING EXPOSURE FOR A SINGLE STRUCTURE, WITH A MIX OF COMMERCIAL HABITATIONAL
AND COMMERCIAL NON-HABITATIONAL EXPOSURE, WRITTEN ON A COMMERCIAL POLICY
This section is applicable to all Companies which either have exposure for
single structures with a mix of commercial habitational and commercial
non-habitational exposure written under a Commercial Policy, or have the
authority to write such policies. If the Company does not have the authority to
write this type of exposure, this section DOES NOT apply; initial the N/A box on
the next page, which completes this ARTICLE. If the Company DOES write, or has
the authority to write, this type of exposure, please read and complete the
remainder of this ARTICLE.
COMMERCIAL-RESIDENTIAL CLASS CODE
If a single structure is used for both habitational and non-habitational
purposes and the structure has a commercial-residential class code (based on a
classification plan on file with and reviewed by the Administrator), the entire
exposure for the structure should be reported to the FHCF under the Data Call,
and the FHCF will reimburse losses for the entire structure as well.
FHCF-2006K
Rule 19-8.010 F.A.C.
20
COMMERCIAL NON-RESIDENTIAL/BUSINESS CLASS CODE
If a single structure is used for both habitational and non-habitational
purposes and the structure has a commercial non-residential or business class
code (based on a classification plan on file with and reviewed by the
Administrator), the habitational portion of that structure should be identified
and reported to the FHCF under the Data Call.
However, in recognition of the unusual nature of commercial structures with
incidental habitational exposure and the hardship some companies may face in
having to carve out such incidental habitational exposure, as well as the losses
to such structures, the FHCF will accommodate these companies by allowing them
to exclude the entire exposure for the single structure from their Data Call
submission, providing the following two conditions are met:
(1) The decision to not carve out and report the incidental habitational
exposure shall apply to all such structures insured by the Company; and
(2) If the incidental habitational exposure is not reported to the FHCF, the
Company agrees it shall not report losses to the structure and the FHCF
shall not reimburse any losses to the structure.
Initial the CARVING box below if the Company is able to carve out and report its
incidental habitational exposure, OR, if this requirement presents a hardship,
the Company must communicate its decision to not carve out and to not report the
incidental exposure by having the individual executing this Contract on behalf
of the Company placing his or her initials in the NOT CARVING box below. If the
Company does not currently write such policies, but has the authority to write
such policies after the start date of this Contract, the decision to carve or
not carve out the incidental habitational exposure must be indicated below.
(BOX) OR (TBM) OR (BOX)
CARVING NOT CARVING NA
By initialing the CARVING OR NOT CARVING box above, the Company is making an
irrevocable decision for the corresponding Contract Year Data Call submission
and any subsequent resubmissions.
IMPORTANT NOTE: SINCE THIS ELECTION WILL IMPACT YOUR DATA CALL SUBMISSION,
PLEASE SHARE THIS DECISION WITH THE INDIVIDUAL(S) RESPONSIBLE
FOR COMPILING YOUR DATA CALL SUBMISSION.
FHCF-2006K
Rule 19-8.010 F.A.C.
21
ARTICLE XIX - SIGNATURES
APPROVED BY:
Florida Hurricane Catastrophe Fund
By: State Board of Administration of the State of Florida
By: /s/ Xxxxx Xxxxxxx, General Counsel for 08/07/2006
-------------------------------------- Date
Xxxxxxx Xxxxxxxxxxx
Executive Director
Approved as to legality:
By: /s/ Xxxxxx X. Xxxx, General Counsel for 08/03/2006
--------------------------------------- Date
Xxxxx Xxxxxxx
General Counsel
FL Bar ID#311911
Liberty American Select Insurance Company f/k/a Mobile USA Insurance Company
Company
By: /s/ T. Xxxxx Xxxxx, Corporate President & CEO 05/22/2006
--------------------------------------------- Date
Name/Title
FHCF-2006K
Rule 19-8.010 F.A.C.
22
ADDENDUM NO. 1
TO
REIMBURSEMENT CONTRACT
EFFECTIVE: JUNE 1, 2006
(CONTRACT)
between
LIBERTY AMERICAN SELECT INSURANCE COMPANY
PINELLAS PARK, FL
(Company)
XXXX # 00000
and
THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA) WHICH
ADMINISTERS THE FLORIDA HURRICANE CATASTROPHE FUND (FHCF)
IT IS HEREBY AGREED, effective at 12:01 a.m., Eastern Time, June 1, 2006, that
this Contract shall be amended as follows:
ARTICLE V - DEFINITIONS
(16) FORMULA OR THE PREMIUM FORMULA
This term means the Formula approved by the SBA for the purpose of
determining the Actuarially Indicated Premium to be paid to the FHCF. The
Premium Formula is defined as an approach or methodology which leads to the
creation of premium rates. The formula shall, pursuant to Section
215.555(5)(b), Florida Statutes, include a factor of 25 percent of the
fund's actuarially indicated premium in order to provide for more rapid
cash buildup in the FHCF. The resulting rates are therefore incorporated as
part of the Premium Formula.
Article VI(4) shall be amended as follows:
ARTICLE VI - EXCLUSIONS
(4) Any liability of the Company attributable to losses for fair rental value,
loss of rent or rental income, or business interruption.
FHCF-2006K-1, rev. 6/06
19-8.010, F.A.C.
1
Article (X)(3)(c)2. is amended as follows:
ARTICLE X - REPORTS AND REMITTANCES
2. In determining reimbursements under this Contract, the SBA shall:
a. Reimburse each of the Companies for the amount (if any) of
reimbursement due under the individual Company's Contract, but
not to exceed for all Loss Occurrences, an amount equal to the
Projected Payout Multiple or the Payout Multiple, as applicable,
times the individual Company's Reimbursement Premium for the
Contract Year.
b. Thereafter, pursuant to Section 215.555(4)(d)2.b., Florida
Statutes, establish the prorated reimbursement level at the
highest level for which any remaining fund balance or bond
proceeds (as limited by Section 215.555(4)(c), Florida Statutes)
are sufficient to reimburse entities created pursuant to Section
627.351(6), Florida Statutes, for reimbursable losses exceeding
the amounts payable pursuant to (a) above for the Contract Year.
The proration shall be determined based on each entity's share of
their aggregate reimbursable losses exceeding the amounts payable
pursuant to (a) above. Any additional reimbursements pursuant to
this paragraph shall not include losses under an entity's FHCF
Retention and will be at the 90% Reimbursement Percentage. In
order to determine the amount available for additional
reimbursements, the SBA will review reported loss information
from all Companies and determine that all Companies which
received payments for reimbursable losses but which did not
exceed their projected payout have settled all, or substantially
all, of their claims eligible for reimbursement. The SBA will
then determine the remaining amount of Claims-Paying Capacity
available for such additional reimbursements.
APPROVED BY:
Florida Hurricane Catastrophe Fund
By: State Board of Administration
By: /s/ Xxxxx Xxxxxxx, General Counsel for 08/07/2006
-------------------------------------- Date
Xxxxxxx Xxxxxxxxxxx
Executive Director
Approved as to legality:
/s/ Xxxxxx X. Xxxx, General Counsel for 08/03/2006
--------------------------------------- Date
Xxxxx Xxxxxxx
General Counsel
FL Bar ID#311911
Liberty American Select Insurance Company f/k/a Mobile USA Insurance Company
COMPANY
By: /s/ T. Xxxxx Xxxxx, Corporate President & CEO
---------------------------------------------
Name/Title Date 05/22/2006
FHCF-2006K-1, rev. 6/06
19-8.010, F.A.C.
2
ADDENDUM NO. 2
TO
REIMBURSEMENT CONTRACT
EFFECTIVE: JUNE 1, 2006
(CONTRACT)
between
LIBERTY AMERICAN SELECT INSURANCE COMPANY
PINELLAS PARK, FL
(Company)
XXXX # 00000
and
THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA)
WHICH ADMINISTERS THE FLORIDA HURRICANE CATASTROPHE FUND (FHCF)
IT IS HEREBY AGREED, effective at 12:01 a.m., Eastern Time, June 1, 2006, that
this Contract shall be amended as follows:
ADDITIONAL COVERAGE OPTION FOR LIMITED APPORTIONMENT COMPANIES PURSUANT TO
SECTION 215.555(4)(B), FLORIDA STATUTES.
Insurers which qualify as Limited Apportionment Companies under s.
627.351(6)(c), Florida Statutes may select additional FHCF reimbursement
coverage of up to $10 million dollars. The additional premium to be charged for
this additional reimbursement coverage shall be 50 percent of the additional
reimbursement coverage provided, which shall include one prepaid full
reinstatement. The additional premium shall be due and payable in three equal
installments on August 1, 2006, on October 1, 2006, and on December 1, 2006. The
minimum retention level that must be retained associated with this additional
coverage layer is 30 percent of the insurer's surplus as of March 31, 2006. The
reimbursement percentage applicable to this additional coverage shall be 100
percent, which includes reimbursement for loss adjustment expense as provided
under the Reimbursement Contract.
This additional reimbursement coverage shall be in addition to all other
coverage provided by the SBA under the Company's Reimbursement Contract and
shall be in addition to the claims-paying capacity of the FHCF as defined in
Section 215.555(4)(c)1., Florida Statutes, but only with respect to those
insurers that select the additional coverage option. This additional coverage
shall not overlap or duplicate coverage otherwise provided for in the
Reimbursement Contract or offset any co-payments. The claims-paying capacity
with respect to all other participating insurers,
FHCF-2006K-2, rev. 6/06
19-8.010, F.A.C.
1
including Limited Apportionment Companies that do not select the additional
coverage option, shall be limited to their reimbursement premium's proportionate
share of the actual claims-paying capacity as defined in Section
215.555(4)(c)1., Florida Statutes and as provided for under the terms of the
Reimbursement Contract. Coverage provided in the Reimbursement Contract for
participating insurers will not be affected by the additional premiums paid by
Limited Apportionment Companies exercising this additional coverage option.
Coverage provided in this additional coverage option shall otherwise be
consistent with terms and conditions as relates to the Reimbursement Contract
including, but not limited to, definitions, coverage for Covered Policies as
defined, exclusions, loss reporting, and examination procedures.
The optional coverage provided in this Addendum expires on May 31, 2007 and is
not renewable.
ALL LIMITED APPORTIONMENT COMPANIES MUST INDICATE BELOW THE LEVEL OF OPTIONAL
ADDITIONAL COVERAGE SELECTED FROM ZERO UP TO THE STATUTORY MAXIMUM OF $10
MILLION DOLLARS. IF NO ADDITIONAL COVERAGE IS SELECTED, THE COMPANY SHALL
INDICATE BY PLACING $0 IN THE BLANK SPACE PROVIDED BELOW.
Amount of Additional FHCF Coverage selected: (Indicate an amount from $0 for no
additional coverage up to $10 million; there is no additional coverage available
in excess of $10 million) $10 Million.
IF THIS ADDENDUM NO. 2 IS RETURNED WITHOUT THE ABOVE BLANK SPACE FILLED IN WITH
A DOLLAR AMOUNT, IT SHALL BE DEEMED BY THE STATE BOARD OF ADMINISTRATION TO BE A
CHOICE NOT TO SELECT THE ADDITIONAL COVERAGE.
Liberty American Select Insurance Company f/k/a Mobile USA Insurance Company
COMPANY
By: /s/ T. Xxxxx Xxxxx, Corporate President & CEO
---------------------------------------------
Name/Title Date 05/22/2006
APPROVED BY:
Florida Hurricane Catastrophe Fund
By: State Board of Administration of
the State of Florida
By: /s/ Xxxxx Xxxxxxx, General Counsel for 08/21/2006
-------------------------------------- Date
Xxxxxxx Xxxxxxxxxxx
Executive Director
Approved as to legality:
By: /s/ Xxxxxx X. Xxxx, General Counsel for 08/03/2006
--------------------------------------- Date
Xxxxx Xxxxxxx
General Counsel
FL Bar ID#311911
FHCF-2006K-2, rev. 6/06
19-8.010, F.A.C.
2
