Important Insurer Information On Tower Hill’s Petition Seeking Emergency Relief from the FHCF
Dec 2, 2008
On November 12, 2008, Tower Hill Insurance Group, LLC filed a petition on behalf of five of its member companies (the “Companies”) with the Florida State Board of Administration (“SBA”) seeking an emergency waiver or variance from the 2008-2009 Florida Hurricane Catastrophe Fund (“FHCF”) premium formula and rates that were adopted in June, 2008 by incorporation into Rule 19-8.028, Florida Statutes.
The Companies claim that because of the FHCF’s inadequate resources to fully reimburse insurers for losses greater than $16.2 billion, the Companies’ premium payments will be in excess of the amount of available coverage. The Companies also request that the SBA recalculate and implement a lower rate that “more accurately reflects the level of coverage actually available to insurers under the reimbursement contracts.”
In light of the petition, insurers should be aware of the following information:
Insurers are required to pay the FHCF premiums that were due December 1, 2008. Failure to do so could result in action by the Florida Office of Insurance Regulation to terminate insurers’ certificates of authority.
It would appear that if a variance or waiver is granted and the premium is recalculated for the Companies, other similarly situated insurers may have a basis to seek reimbursement or recalculation of premiums paid as of December 1, 2008. Otherwise, the application of the Rule would violate principles of fairness. (Section 120.542, Fla. Stat.)
If you have any questions about the consideration of intervention (becoming a party) in the relief requested by the Companies, the protection of your rights with regard to this matter, or desire consultation on the submission of comments (to be submitted by the SBA no later than December 5, 2008), please contact Colodny Fass.
Pursuant to the SBA’s notice of variance published on November 26, 2008, “any interested person or other agency may submit written comments on the petition for wavier or variance within 5 days after the notice….” (not including the legal holidays, or Saturday or Sunday), submitting a comment “does not alone confer party status in any proceeding arising from a petition for variance or waiver”. See r. 28-104.003, FAC.
Colodny Fass is further researching the issues involved in this matter. We will continue to monitor developments and provide updates as they become available.
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