State Board of Administration Workshop re Insurance Capital Build-up Incentive Program 7/24/06
Jan 14, 2007
The State Board of Administration (“SBA”) held a workshop this morning to discuss further clarifications to the emergency rule regarding the Insurance Capital Build-Up Incentive Program established by Senate Bill 1980. The SBA plans to issue a Notice of Change to the emergency rule that will address two main points: the required 2:1 writing ratio and the funds that will be considered “new capital” for applicant companies.
Under the program, an insurer’s existing surplus, new capital contribution and the surplus note must total at least $50 million, and the insurer must commit to meeting a minimum writing ratio of net written premium to surplus of at least 2:1 for the term of the surplus note. Essentially the Notice of Change will allow companies more flexibility if the companies appear to be close to the 2:1 writing requirement but have not actually met the requirement, and if an applicant company is brand-new, all the funds invested in the company will be considered “new capital” for purposes of meeting the $50 million requirement.
The SBA plans to publish the Notice of Change by next week. Should you have questions or concerns you may contact Tracey Allen at tracey.allen@sbafla.com, or this office.
Katherine A. Scott