ALERT–Florida Hurricane Catastrophe Fund to Require Reporting of Insured Addresses by September 1, 2015

Aug 14, 2015

Above:  Colodny Fass Shareholder Wes Strickland Notes Upcoming Reporting of Policyholder Street Addresses Represents a Substantial Departure From Previous Cat Fund Data Call Requirements


All insurers that participate in the Florida Hurricane Catastrophe Fund (the “Cat Fund”) will be required to report the street addresses of their policyholders’ properties as part of the annual Cat Fund data call due to be filed September 1, 2015.  The addition of street-level addresses of covered policies is a substantial departure from previous data call requirements, which have only required reports of insured values by ZIP code in the past.

As discussed in greater detail below, the Cat Fund’s governing statute does not specifically authorize collection of street-level data from insurers, and it is unclear whether the public records exemption applicable to the data call is specific enough to cover street addresses.  These and other issues have prompted a number of insurers to express serious concerns about disclosing to the Cat Fund street addresses of their policyholders, which they deem to be proprietary and trade secret information.

The annual data call is required to be submitted via the Cat Fund’s Web Insurer Reporting Engine (“WIRE”) pursuant to Rule 19-8.029, Florida Administrative Code.  An amendment to Rule 19-8.029 became effective as of May 12, 2015.  The recently amended Rule incorporated by reference a revised Form FHCF-D1A, which provides instructions to insurers for how to complete the data call submission.  Page 2 of these instructions indicates that “Two fields have been added for the reporting of the street address for the property insured under each Covered Policy (see page 14).”  In turn, pages 7 and 14 of the instructions explain that insurers are to enter the street number and name for the physical location of the property being reported in Field #13 of the submission file.  Any secondary address information, such as apartment or unit number, is to be reported in Field #14 of the submission file.

Nothing in Rule 19-8.029 or the revised Form FHCF-D1A discloses the Cat Fund’s purpose for requesting street addresses or its intended use of such information.  Moreover, nothing in the Rule or form explains whether or under what circumstances the Cat Fund may disclose the street addresses to third parties, such as reinsurers or the Cat Fund’s contracted administrator, Paragon Strategic Solutions, Inc.–an affiliate of Aon Benfield.

The Cat Fund’s annual data call Form FHCF-D1A has been promulgated under rulemaking authority delegated to Florida’s State Board of Administration (“SBA”), which administers the Cat Fund, pursuant to Section 215.555(3), Florida Statutes.  (“The [SBA] may adopt such rules as are reasonable and necessary to implement this section . . . .”)  This grant of rulemaking authority is general in nature and, under the applicable requirements of the Florida Administrative Procedure Act, the SBA’s rulemaking authority must be limited to implementing specific requirements established by Section 215.555, Florida Statutes.

An annual report of insured values is specifically required by Section 215.555(5)(c), Florida Statutes, which provides in pertinent part as follows:  “No later than September 1 of each year, each insurer shall notify the board of its insured values under covered policies by zip code, as of June 30 of that year.” (emphasis provided)  The Cat Fund then uses these reports of insured values to calculate the reimbursement premiums due from participating insurers.

There is nothing in Section 215.555, Florida Statutes specifically directing or authorizing the Cat Fund to collect the street addresses of its participating insurers’ policyholders.  As noted above, insurers that are required to participate in the Cat Fund are only required to report insured values by ZIP code.  Any interpretation that the Cat Fund is authorized to collect street addresses for covered policies as part of the annual data call would nullify the clear requirement for reports of insured values to be made by ZIP code.

Due to the confidential and proprietary nature of the information contained in the report of insured values required by Section 215.555(5)(c), Florida Statutes, such reports are deemed confidential and exempt from Florida’s expansive public records laws pursuant to a specific exemption set forth in Section 215.557, Florida Statutes.  Under Florida case law, exemptions from the public records laws are narrowly construed and limited to their stated purpose.  The public records exemption in Section 215.557 expressly applies to “reports of insured values under covered policies by zip code . . . .” (emphasis provided)

Although it could be argued reasonably that this exemption is broad enough to cover the entire report of insured values, including any street-level data that might be in the report, it is not clear whether a court would agree with that interpretation since the public records exemption and the underlying statutory reporting requirement clearly reference reports of insured values by ZIP code.

In order to ameliorate the uncertainty regarding the public records exemption, insurers that intend to include street addresses in their data call submissions to the Cat Fund in accordance with the new Form FHCF-D1A should consider designating such street-level data as trade secret information in connection with the filing.  Under Florida law, trade secrets filed with an agency can be deemed confidential and exempt from public records disclosure laws, provided the information satisfies the applicable definition of “trade secret” and such information is clearly designated trade secret at the time such information is filed with the agency.  A designation of trade secret is unlikely to be effective if made after the date of submission of the data.

It is important for insurers to note that the trade secret exemption and procedures authorized under the Florida Insurance Code in Section 624.4213, Florida Statutes technically would not apply to a designation of trade secret information filed with the Cat Fund, which is not part of the Florida Office of Insurance Regulation or Florida Department of Financial Services.  However, the procedures for designating and filing trade secrets under the Florida Insurance Code exemption should be more than sufficient to comply with the general trade secret exemption available under Florida law.  Any trade secret notice that is submitted to the Cat Fund should be reviewed by legal counsel to ensure that it cites the applicable provisions of Florida law.  As explained above, the trade secret notice needs to be filed in advance of or contemporaneous with the submission of the data call.

Insurers that elect not to include street addresses of their policyholders in the Cat Fund data call due September 1, 2015, should be aware that failure to make the submission in accordance with Rule 19-8.029, Florida Administrative Code, technically is deemed to constitute a violation of the Florida Insurance Code.  Under Rule 19-8.030(5)(d), Florida Administrative Code, a data call submission that has incomplete data will likely result in a notice from the Cat Fund to resubmit the data within 30 days.  The fee for a resubmission is $1,000.

In addition, pursuant to Rule 19-8.030(9), the Cat Fund may refer any violation of its rules to the Florida Office of Insurance Regulation.  It is unclear what administrative action the Florida Office of Insurance Regulation might take against an insurer that omits the street address information from its data submission.

Unless the Cat Fund agrees to refrain from enforcing the collection of street-level data, insurers that elect to omit policyholder street addresses from the Cat Fund’s data call should consider filing a challenge to the underlying rule pursuant to the applicable provisions of the Florida Administrative Procedure Act.

Colodny Fass is communicating with the Cat Fund and Florida Office of Insurance Regulation regarding the issues described above.


Should you have any questions or comments, please contact Colodny Fass Shareholder Wes Strickland at or +1 (850) 241-1263.



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