Florida Workers’ Compensation Joint Underwriting Association Board of Governors OKs Commutation
Oct 12, 2012
At its meeting this week, the Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Board of Governors (“Board”) voted unanimously to accept a $2,500 offer from Catalina Holdings for full and final commutation of the 2005 Quanta Reinsurance contracts.
The October 8, 2012 meeting materials are attached.
FWCJUA Executive Director Laura Torrence explained that Quanta Reinsurance was acquired in 2008 by the privately-held, Bermuda-based runoff specialist Catalina Holdings. Catalina subsequently is attempting to close the books on several mature contracts as a result, and offered $2,500 for full and final commutation of the FWCJUA contracts, Ms. Torrence said. The offer is scheduled to expire on October 11, 2012.
FWCJUA advisors told the Board the offer was reasonable.
After little discussion, the Board voted unanimously to approve the offer.
It was noted that that “sunset clauses” in the Quanta Reinsurance contract would soon activate, thus eliminating the possibility of collecting under the Quanta Reinsurance contract, anyway.
“What is also particularly important to appreciate is we have sunset clauses on these catastrophe contracts . . . the sunset clauses kick in at the end of this year. And so, 80-some odd days from now we couldn’t collect under the contract if we wanted to – so this seems to be money from the sky that is being offered. That is our view of the situation,” it was stated.
“It really is not much of a decision to say the $2,500 is found money,” Ms. Torrence told the Board. “I think this is probably a generous offer or an oversight on their part.”
The money will go into the operations account for the 2005 Policy Year, she said.
With no other business before the Board, the meeting was adjourned.
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