Florida Surplus Lines Service Office Board Reviews 2015 Budget, Audits, Operations
Oct 22, 2014
The Florida Surplus Lines Service Office (“FSLSO”) Board of Directors (“Board”) met in Tallahassee today, October 22, 2014.
As part of its agenda, the Board considered the FSLSO’s proposed 2015 operating budget of $6.5 million, which represents a decrease of $731,000–or 10 percent–over 2014. The Board ultimately approved the proposed budget, which included a line-item increase to cover potential expenses from the expected renegotiation of the Non-Admitted Insurance Multi-State Agreement (“NIMA”) Clearinghouse services contract.
The FSLSO budget also included a reduction of 11.4 percent in compliance program review expenses based on historical spending patterns and an estimated number of reviews projected for 2015.
The budget provides for increased spending on outreach programs that will include new educational activities.
When compared with actual spending in 2014, the FSLSO’s 2015 budget for insurer financial reviews represents an increase of 48 percent due to the Florida Office of Insurance Regulation (“OIR”) having been unable to perform reviews of insurer audits, actuarial reserves and related documents during 2014 because of a technical glitch in which the National Association of Insurance Commissioners’ computer system denied regulators access to the necessary databases.
In his update, FSLSO Executive Director Gary Pullen reported that the FSLSO is waiting for approval from OIR to cease collecting the Florida Hurricane Catastrophe Fund Emergency Assessment.
He also indicated that an operational audit of the FSLSO’s information technology department will be completed during the next month.
Other FSLSO developments include the creation of a partnership with the OIR on the development of a five-hour continuing education program and efforts to ensure consistency for the FSLSO’s logos and trademarks on all related forms and communications.
It was noted that there are concerns with the FSLSO’s Web-based services Tax/Fee/Assessment Estimator for single-state Florida brokers and vendors in regard to its calculation accuracy for non-NIMA states.
Reported Florida surplus lines premium is currently down 1 percent compared with 2014. Year-to-date FSLSO revenues have exceeded expenses by $3 million.
The FSLSO agent services report indicated that 5,000 policies and transactions have been audited in 2014. The audits revealed about 140 policies that have not been filed.
During the third quarter of 2014, 36 new surplus lines agents have been approved by the OIR.
The Board was also updated on two FSLSO agent continuing education seminars and a Webinar that were given during same time period.
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