FIGA Board of Governors Meeting Report: June 25, 2009

On Thursday, June 25, 2009, the Florida Insurance Guaranty Association (“FIGA”) Board of Directors (“Board”) met via teleconference and discussed the following:

 

Receivers Report

A report was given on recent receivership matters.  It is anticipated that $30 million in early access dollars will be made available to FIGA within the next few months in order to assist with claims payment.  Previously, it was estimated that FIGA only would receive $5 million in early access dollars for 2009. 

Coral Insurance Company is now in rehabilitation and it does not appear to require the services of FIGA at this time.

 

Financial Statements

FIGA’s assets continue to decrease annually, and, as of March 31, have decreased by $75 million.  This decrease relates directly to claims payments made to Citizens Property Insurance Corporation. 

As a result of collecting more assessments than expected, lower-than-anticipated claims payments for the first half of 2009 and the anticipated additional $25 million in early access dollars, FIGA has accrued a cumulative $12 million in surplus through May 2009.

 

Contract Approvals

All contract approvals on the Board agenda were authorized with minimal discussion.

 

Claims Administration Agreements

FIGA has split its claims administration into two separate contracts to reflect the different level of FIGA information access privileges held by field adjusters and third-party administrators.

Field adjusters, who inspect claim damage, have minimal access, while third-party administrators, who process claims in a similar manner to regular FIGA employees, may log into the FIGA computer system.

The claims administration agreements were revised appropriately and approved with minimal discussion.

 

Travel and Reimbursement Policy

Amendments to FIGA’s travel and reimbursement policy regarding the type of expenses available for reimbursement were approved.

 

Board Member Conflict of Interest and Ethics Policy

The Board Member Conflict of Interest and Ethics Policy regarding vendors and gifts was clarified and approved as amended.

 

Legal Report

A legislative and regulatory update was given as part of the Legal Report. 

During the Florida 2009 Regular Legislative Session, FIGA-related provisions were passed in Senate Bill 2188 relating to Administrative Procedures and House Bill 1495, the omnibus property insurance bill.

SB 2188 was signed into law by Florida Governor Charlie Crist on June 16.  This bill requires each state-run agency to give notice of public meetings, hearings and workshops on its Website and requires that certain materials submitted to each state-run agency by interested parties be made a part of the public record. 

Among the provisions in HB 1495, which was signed into law by Governor Crist on May 27, is authorization for insurance agents to mention the existence of FIGA to policyholders.

Proposed changes to the FIGA Plan of Operation (“Plan”) were discussed at length.  In response to a letter from Florida Chief Financial Officer Alex Sink, FIGA has been working to increase the Plan’s transparency, especially in the area of external contracts.  

FIGA Staff compared the operations of other state-run agencies to FIGA’s current Plan and determined that Citizens Property Insurance Corporation has the best methods of handling transparency.  All other state-run entities were found to operate at, or below, FIGA’s current transparency level. 

It was determined that FIGA’s proposed Plan changes would increase contract transparency and clarify Board and individual Director duties.  After discussion, all changes to the FIGA Plan were approved.  The amended Plan next will be sent to the Florida Department of Financial Services for approval.

The meeting was then adjourned.

 

Should you have any questions or comments, please contact Colodny Fass.

 

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