Florida Office of Insurance Regulation Notifies Residential Property Insurers of Statutory Changes to the Minimum Surplus Requirements
Jul 6, 2011
Pursuant to the enactment of CS/CS/CS/SB 408, the Florida Office of Insurance Regulation (“OIR”) issued a July 1, 2011 Informational Memorandum (OIR-11-O5M) advising all residential property insurers in the State of Florida of changes to the minimum surplus requirements.
Specifically, the OIR Memorandum notifies insurers of the legislative amendment to Section 624.407, Florida Statutes, regarding surplus required for new domestic insurers to receive authority to transact residential property insurance, and the amendment to Section 624.408, F.S, regarding surplus required for property and casualty insurers authorized to underwrite any line of residential property insurance to maintain a certificate of authority.
To access a copy of CS/CS/CS/SB 408, which became effective on May 17, 2011, click here.
As amended, Section 624.407(1)(e)1, F.S. now provides that $15 million is the surplus required for new domestic property and casualty insurers that are not a wholly owned subsidiary of an insurer domiciled in any other state to receive authority to transact residential property insurance.
Section 624.408(1)(f), F.S., as amended, now provides that $15 million is the surplus required to maintain a certificate of authority for property and casualty insurers authorized to underwrite any line of residential property insurance and not holding a certificate of authority before July 1, 2011.
Section 624.408(1)(g), F.S., as amended, now provides that the surplus required to maintain a certificate of authority for property and casualty insurers authorized to underwrite any line of residential property insurance holding a certificate of authority before July 1, 2011, and until June 30, 2016 is $5 million; on or after July 1, 2016, and until June 30, 2021, $10 million; on or after July 1, 2021, $15 million.
However, the OIR notes that all property and casualty insurers writing residential property insurance must also maintain a surplus of 10 percent of liabilities, if greater than the minimum surplus requirement. The new requirements are in addition to other solvency and regulatory requirements applicable to property and casualty insurers.
Section 215.555(2)(c), F.S. provides that “residential property coverage” means any insurance policy covering both personal lines residential and commercial lines residential property in Florida, including, but not limited to, any homeowners, mobile homeowners, farm owners, condominium association, condominium unit owners, dwelling, tenants, or apartment building policy, or any other policy covering a residential structure or its contents.
To view the Memorandum online, click here.
Should you have any questions or comments, please contact Colodny Fass.
To unsubscribe from this newsletter, please send an email to Brooke Ellis at bellis@cftlaw.com.