FIGA Board Meeting Report

On Wednesday, February 13, 2008, a representative of this firm attended the Board of Directors’ (“Board”) Meeting of the Florida Insurance Guaranty Association (“FIGA”). Several reports were provided to the Board and actions were taken on necessary items. Below is a brief summary of the actions and discussions that took place during the meeting.

A regulatory and legislative report was given. It was noted that the Senate and House seem to have different opinions related to property and casualty insurance issues. The report included mention of a bill filed on behalf of Florida Chief Financial Officer Alex Sink that would reduce Florida’s exposure in the Florida Hurricane Catastrophe Fund.

A representative from the National Conference of Insurance Guaranty Funds (“NCIGF”) provided an update of that organization’s recent activities. NCIGF is in the process of updating its strategic plan with a goal of improving claims handling. Also, it has been promoting the critical roles of guaranty associations by submitting articles in national publications. Another NCIGF goal is to improve communications with legislators and regulators nationwide.

The Operations Report reviewed by the Board indicates that the Poe insolvency continues to provide several challenges for FIGA. Along with a brief review of FIGA contracts, there was a report on the consolidation of the American Guaranty Fund Group (“AGFG”) offices in Tallahassee. It was reported that the move was “seamless,” and that the Jacksonville office is scheduled to close on April 11, 2008.

A motion was passed to approve an organizational restructuring between AGFG and FIGA and the Florida Worker’s Compensation Insurance Guaranty Association (“FWCIGA”).

An employer liability assessment contract between FIGA and FWCIGA was also was approved by the Board.

A report on the Public Finance Working Group was given. Future FIGA bond issuances will require court approval, which is expected. FIGA’s ability to access the bond market is good, but actually securing needed debt is not as certain. There was further discussion on whether bonds are the proper mechanism to pay claims, or whether other mechanisms, such as lines of credit, should be used. It was concluded that FIGA’s current bond strategy is appropriate.

A Claims Status Report was provided, during which it was noted that a recurring trend is evident in FIGA claims: Many new claims are primarily related to activities by public adjusters.

The Receivers Report was given. Currently, there are no impending insolvencies from any recent events. Although there are five companies currently in rehabilitation that are in danger of insolvency, they do not appear to require the services of FIGA at this time.

The Board approved the Financial Report. It was noted that the FIGA budget is sound and FIGA is slightly under budget.

Finally, the Board elected officers for 2008-2009. There being no other old or new business before the Board, the meeting adjourned.

Should you have any questions regarding the above matters, please feel free to contact this office.

 

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