Florida Hurricane Catastrophe Fund Advisory Council 1/24/2006
Dec 20, 2006
On January 19, 2006, the Florida Hurricane Catastrophe Fund (FHCF) Advisory Council met from 1:00-4:00pm in Tallahassee. Jack Nicholson, FHCF’s senior officer, presented to the Advisory Council on the 2006/2007 FHCF Reimbursement Contract and Data Call Changes. Mr. Nicholson advised that specific technical changes were discussed thoroughly during a Rule Workshop earlier that morning. The Advisory Council considered other changes to the contract, including exclusions of barns with apartments, builders risk, vacant property and recreational policy or endorsement. Significant discussion occurred regarding whether companies that solely write jewelry should be excluded from the FHCF. The Advisory Council decided that further review was needed before the Council made a decision. Mr. Nicholson explained to the Advisory Council several additional changes to the Contract, such as a new deadline for Interim Loss reports, new participants and coverage selections, language clarifications and changes to the language regarding advances, which will ensure better protection for the FHCF in cases involving insolvent insurers.
Next the Advisory Council voted and approved that all the current proposed Rules be published and Noticed . Then Mr. Nicholson presented the FHCF Officer’s report, where he explained that companies reported total losses of $3.75 billion for the 2004 hurricane season. As reported in January 2005, the FHCF expected to pay out $2.5 billion for 2004 losses, meaning current figures now show an 80% increase to what was originally expected. There remains an outstanding $338 million to be paid to insurers for 2004 losses. It was reported that 132 insurers triggered the FHCF, and 5 additional insurers are still expected to trigger the fund.
Mr. Nicholson reported that, for the 2005 hurricane season, the FHCF has currently reimbursed or advanced insurers $274.5 million. Total expected FHCF reimbursements are $2.5 billion. Only 10% of expected losses have been paid to date, with an outstanding $2.3 billion to be paid out to insurers. Ninety-nine insurers are expected to trigger coverage, but currently only 24 have triggered the fund.
Mr. Nicholson then discussed the FHCF’s legislative issues for the upcoming regular session. Mainly, the issues revolved around clarifying language and correcting obsolete language. The meeting concluded after a representative of the State Board of Administration reported the FHCF investment results. A copy of the agenda and presentation is attached.
Should you have any questions or concerns, please do not hesitate to contact Colodny Fass.