Florida Hurricane Catastrophe Fund 2010/2011 Exposure Examination Information; Frequently Asked Questions Updated
Sep 3, 2010
FHCF Exposure Examination Information Posted
To assist insurers in preparing for its 2010/2011 Contract Year exposure examination, the Florida Hurricane Catastrophe Fund (“FHCF”) has issued the following advance preparation materials (to access the documents, click on the hyperlinks below):
- Instructionson examination preparation;
- A list of questions that must be answered relating to operations, policy information, claims and reporting; and
- A checklist of records that must be submitted as part of the examination.
Note: Additional instructions and special exams apply to insurers with assumption and quota share agreements with Citizens Property Insurance Corporation.
FHCF Frequently Asked Questions Updated
The following questions and topics have been updated in the FHCF’s “Frequently Asked Questions“ document (applicable sections are reprinted below):
Residences/Buildings Under Construction
Q: Our company has several policies where the residence is being remodeled or added on to, but is still occupied by the insured. Would the FHCF exclusion (16), “Any exposure for builders risk coverage or new residential structures still under construction”, apply to these, or would they still be covered?
A: If the addition is covered under a builder’s risk policy or endorsement, then it would not be considered a covered policy and should not be reported to the FHCF. The part of the home that is already constructed would be covered by the FHCF under a homeowners policy.
Scheduled Personal Property in a Vault Off Premises
Q: Our company insures an individual’s scheduled personal property, such as jewelry or artwork, and the items are located in a vault off premises. Is the exposure reportable to the FHCF?
A: No, since the property is located in an off premises vault.
Exposure/Data Call Reporting
Q: Our company provides Additional Living Expense (“ALE”) coverage on Residential Homeowners policies at an unlimited amount. How should the ALE coverage be reported to the FHCF?
A: Since an unlimited dollar amount of coverage is provided, your company should report ALE up to the maximum percent (40%) allowed.
Q: If we have a blanket deductible greater than $50,000 and a blanket limit, how do we convert the blanket deductible to a percentage deductible?
A: Per the Data Call, you are required to report the full blanket deductible for each risk/building/expsoure and the lesser of the full blanket limit or the full wind exposure value for each risk/building/exposure. Therefore, the percentage deductible should be calculated from these numbers.
Q: When reporting policies with multiple risks/locations and a per occurrence blanket limit, are we required to report each risk separately at the maximum limit per occurrence?
A: If the risks are located in different ZIP Codes or have different rating factors, then each risk must be reported separately at the lesser of the full blanket limit or the exposure value for the risk. If the risks are located in the same ZIP Code and share the same rating factors, they should be reported together as one record with the lesser of the full blanket limit or the exposure value for the combined risks. For example, if two risks have an exposure value of $2M each and a blanket limit of $5M, the exposure amount to be reported for record would be $4M.
Condominium Unit Owners
Q: My company’s condominium unit owners policy provides for a standard dwelling limit of $1,000 (additions and alterations coverage), which is listed on every condominium unit owners policy written and is provided at no additional premium. Should this standard limit be reported to the FHCF as additional exposure?
A: No. The standard $1,000 limit for this coverage is not reportable as indicated on page 13 of the 2010 Data Call instructions.
Q: If my company writes a deluxe condominium unit owners policy that provides a standard dwelling limit of $5,000, should the exposure be reported?
A: Yes. Page 13 of the Data Call instructions only allows for an exclusion from reporting for a $1,000 standard dwelling limit provided on condominium unit owners policies.
Q: Our company does not collect roof-deck attachment information, but we do capture whether a dwelling is compliant with the Florida Building Code effective March 1, 2002. If we know the Code specifies a minimum roof-deck attachment for a particular risk (geographic location) and that specification matches the FHCF Roof-Deck Attachment code “4” (Reinforced Concrete Roof Deck), may we report FHCF code “4”?
To view the complete list of Frequently Asked Questions about the FHCF, click here.
Should you have any questions or comments, please contact Colodny Fass.
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