Florida Cabinet to Consider FHCF, OIR Items July 29

The Florida Cabinet is scheduled to meet on Tuesday, July 29 at 9 a.m. at The Capitol in Tallahassee.  To view the complete agenda, click here.

A representative from Colodny Fass will attend the meeting and provide a report on the procedings.

Insurance-related agencies scheduled to present during the meeting include:

 

Florida Office of Insurance Regulation (“OIR”)

Among the OIR agenda items include: A request for Approval for Publication of Proposed Rule 69O-170 Part IV; Repeal; Rate Filings, Arbitration Rule of Procedure.

Florida law formerly provided that when the OIR disapproved a rate filing for property and casualty insurance, the insurer had the right to require that its appeal of the disapproval be handled by arbitration. These Rules were promulgated to set up a procedure by which that arbitration would take place.  Subsequent to the promulgation of these Rules, the law was amended, and now provides that the right to arbitration will no longer apply to these rate filings, and will not apply to rate filings made before January 1, 2009. Consequently,  the OIR is recommending that these Rules need to be repealed.

 

Florida State Board of Administration (“SBA”)

Items 10, 11 and 12 on the SBA agenda relate to the Florida Hurricane Catastrophe Fund (“FHCF”).

ITEM 10. Request authorization for the FHCF to file Rule 19-8.010, F.A.C. for adoption. The changes to this rule were necessitated by the 2008 legislation extending the $10 million optional FHCF coverage for an additional contract year. Permission was granted on May 28, 2008, to file this rule for Notice of Proposed Rulemaking. No member of the public requested a rule hearing; thus, no rule hearing was held. This rule, as amended, is now ready for certification. No changes have been made to this rule or the incorporated form since the Trustees approved this rule and the incorporated form for Notice of Proposed Rulemaking on May 28, 2008.

ITEM 11. Request approval of Put Option Agreement between the State Board of Administration, the Florida Hurricane Catastrophe Fund Corporation (Corporation), and Berkshire Hathaway Inc. On July 2, 2008, the Board authorized the FHCF and the Corporation to develop specific proposals to secure funding for the FHCF that would permit the FHCF to secure at least $4 billion in bonds through a Put Option.

ITEM 12. Request approval of the appointment of Randy Dumm, Ph.D., as Chair of Florida Commission on Hurricane Loss Projection Methodology, for the 2008-2009 year. Each year, the SBA is required to appoint a Commission member to serve as Chair, Section 627.0628(2)(d), F.S. During a regularly scheduled meeting on May 20, 2008, the Commission voted to recommend Dr. Dumm, Insurance Finance Expert, Florida State University, be reappointed as Chair for the 2008-2009 year.

 

Florida Hurricane Catastrophe Fund Finance Corporation

Item 2.  Request acceptance and acknowledgement of Put Option Agreement between the SBA and Berkshire Hathaway Inc., which would require the issuance of bonds by the Florida Hurricane Catastrophe Fund Finance Corporation (Corporation) upon the giving of Notice by the SBA to Berkshire Hathaway Inc.  On July 2, 2008, the Board of Directors of the Corporation authorized the Corporation to develop a resolution authorizing the Corporation to engage in financial transactions to provide additional funding to the FHCF. The Put Option Agreement, if exercised by the SBA, would provide additional funding to the FHCF but it would also require the Corporation to issue bonds. Thus, it is necessary that the Board of Directors of the Corporation accept and acknowledge the Put Option Agreement.

 

Should you have any questions or comments, please do not hesitate to contact Colodny Fass.

 

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