Florida Commission on Hurricane Loss Projection Methodology August 11-13 Meeting Report: Day One
Aug 12, 2009
On the first day of a meeting scheduled for August 11, 12 and 13, 2009, the Florida Commission on Hurricane Loss Projection Methodology (“Commission”) focused primarily on editing its Acceptability Standards for the coming year. Pursuant to the passage of Senate Bill 1758, revisions to actuarial methods, standards and models will be reviewed by the Commission every odd year, rather than annually.
The meeting was opened with the unanimous election of Scott Wallace as incoming Commission Vice Chairman.
The majority of the day’s discussion centered on the work of the Meteorological Standards and Forms Committee. Minor administrative edits and changes were made to clarify the requirements of the Standards, which the Commission anticipated would result in Modelers’ submission of more of the type of information that was actually needed.
Commissioners discussed allowing more flexibility to the Modelers in order to improve their submissions. It was noted that Models accurately represent nearly 110 years of available data.
A Citizens Property Insurance Corporation (“Citizens”) representative testified regarding the use of models in filing rate requests. Unlike private insurers, Citizens may not contest its rates, which are set by the Florida Office of Insurance Regulation using the Florida Public Model.
The Citizens representative said that mitigation features are currently incorporated by 67 percent of all policyholders and the Florida Public Model is not able to accurately measure all possible combinations of them. She added that the Florida Public Model also is unable to factor mitigation discounts into reflecting a more accurate rate calculation.
Spokesmen for the Florida Public Model were on hand to explain that their model incorporates nearly 7,000 possible combinations of mitigation features. Because no model could handle that much data, they explained, the four most common mitigation feature combinations are selected and generally applied.
The Commission decided to further explore various mitigation features and applicable discounts, such as those used for tall, mixed-use buildings.
Modelers explained that an analysis of various tall buildings would be difficult because of their lack of uniformity, whereas residential houses share similar features.
To view the meeting agenda, click here.
Should you have any questions or comments, please contact Colodny Fass.
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