Florida Commission on Hurricane Loss Projection Methodology Completes Revisions to Acceptability Standards

Nov 17, 2011


After several hours of detailed review yesterday, November 16, 2011, the Florida Commission on Hurricane Loss Projection Methodology (“FCHLPM”) approved a long list of revisions to several hurricane modeling standards that last month stirred hours of debate.

The FCHLPM unanimously approved changes to the 2009 Standards to Determine Acceptability (“Standards”) that included revisions to highly-technical language, editorial content, numbering and order.  The final version of these Standards will become the 2011 version, which must be formally published by December 31, 2011, according to Florida Hurricane Catastrophe Fund Management Review Analyst Donna Sirmons.

The Standards under review included Actuarial Standard A-6, entitled “Logical Relationship to Output File,” which was renumbered with removal of the condo unit form as proposed by modelers, as were Actuarial Forms A-1 through A-5.  The forms address loss costs by ZIP code, cumulative losses from the 2004 Hurricane Season and output ranges.  Many of the changes involved clarification of coverage limits, certain language, deductibles, color-coding of maps and the deletion of certain tables.

The Actuarial Standards include modeling input data, event definition, modeled loss cost and probable maximum loss considerations, policy considerations, coverages, and loss output.  In October 2011, the proposed revisions to the Actuarial Standards provoked such heated discussion, it was agreed that additional time would be spent discussing any changes with modelers and the Professional Team before bringing these Standards back to the FCHLPM for a second time.

“This is a giant step forward.  I think we are going to have some minimal problems in the next year but we now have control over the data like we never had before,” said Floyd Yager, chairman of the Actuarial Standards Committee.

Vulnerability Standards – which also spurred much discussion last month — were also approved after limited debate.  Discussion focused on Standard V-3 Mitigation Measures, which addresses the survivability of a structure and its contents.  Vulnerability Standards V-1 and V-2, along with Forms V-1, V-2, and V-3 were all approved after wording was clarified related to the application of mitigation measures and the impact on reducing damage.

Changes to Statistical Standard S-1 and Form S-2 were mostly editorial, including adding space in the Standard for a link to the location of a Form.  The FCHLPM approved the revisions with no discussion.

The FCHLPM also voted to approve the Model ID and Submission Data with no discussion.  Those items were not approved during the October 19/20 meeting for lack of time. 

FCHLPM Chairman lauded the commission members for working so hard to complete all the arduous revisions.

“There were some exhausting hours that went into this but I think we have a terrific product in our Report of Activities,” Mr. Wallace said.

With no further business before the FCHLPM, the meeting was adjourned.


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