Section 19-8.028 - Reimbursement Premium Formula(1) Purpose. This rule adopts the Premium Formula to determine the Actuarially Indicated Reimbursement Premium to be paid to the Florida Hurricane Catastrophe Fund, as required by Section 215.555(5)(b), F.S.(2) Definitions. The definitions in the Reimbursement Contract for the applicable Contract Year also apply to this rule and the forms referenced in this rule. In addition, as used in this rule:(a) "SBA" means the State Board of Administration of Florida.(b) "Contract Year" is defined in Section 215.555(2), F.S.(c) "Independent Consultant" means the independent individual, firm, or organization with which the SBA contracts to prepare the Premium Formula and any other actuarial services for the FHCF, as determined under the contract with the Consultant.(3) The Premium Formula. (a) The Formula for determining the Actuarially Indicated Reimbursement Premium to be paid to the Fund, as required by Section 215.555(5)(b), F.S., is the rate times the exposure per $1,000 of insured value and this equals the Premium to be paid in dollars. The premium rates are determined by taking into account geographic location by zip code; construction type; policy deductible; type of insurance and other such factors deemed by the SBA to be appropriate. The Formula is developed by an Independent Consultant selected by the SBA, as required by Section 215.555(5)(b), F.S.(b) For the 2024/2025 Contract Year, the Formula developed by the SBA's Independent Consultant, "Florida Hurricane Catastrophe Fund 2024 Ratemaking Formula Report Presented to the State Board of Administration of Florida March 21, 2024, http://www.flrules.org/Gateway/reference.asp?No=Ref-16826," as approved by the SBA, is hereby adopted and incorporated by reference into this rule. The premium rates are developed in accordance with the Premium Formula methodology approved by the SBA.(4) Special Circumstances. (a) Allocation of Premium. Premiums paid to the FHCF with reference to property covered by Quota Share Primary Insurance Arrangements, as that phrase is defined in Section 627.351(6)(c)2.a.(I), F.S., will be allocated by the FHCF between the Company and Citizens in accordance with the percentages specified in the Quota Share Primary Insurance Arrangement for the purposes of premium billing, calculating retentions and determining reimbursement payments.(b) Special Rating Circumstances. The Premium Formula for policies that, based upon sound actuarial principles, require individual ratemaking and which are not excluded by rule will be based on the use of computer modeling for each individual Company for which it is applicable, i.e., portfolio modeling. The Independent Consultant will recommend guidelines for individual Company portfolio reporting and modeling to estimate individual Company FHCF expected losses. Individual Company FHCF expected losses for portfolio modeling exposures will be loaded for investments and expenses on the same basis as the FHCF premium rates used for non-portfolio modeling exposures, but will also include a loading for the additional cost of individual Company modeling. The minimum exposure threshold for FHCF portfolio modeling rating will be sufficient to generate estimated FHCF premium greater than the cost of modeling and other considerations and will be calculated by the Independent Consultant for the separate coverage levels of 45%, 75%, and 90% using the premium rates established pursuant to subsection (3). The methodology used by the Independent Consultant will be based on sound actuarial principles to establish greater actuarial equity in the premium structure. Special recognition is not given to Companies that do not have exposure for Covered Policies for an entire Contract Year, except for New Participants as required by Article X(1) and X(2) of the Reimbursement Contract.
(5) All the forms adopted and incorporated by reference in this rule may be obtained from the FHCF website at http://fhcf.sbafla.com.Fla. Admin. Code Ann. R. 19-8.028
Rulemaking Authority 215.555(3) FS. Law Implemented 215.555(2), (3), (4), (5), (6), (7) FS.
New 9-20-99, Amended 7-3-00, 9-17-01, 7-17-02, 7-2-03, 7-29-04, 7-17-05, 7-6-06, 7-17-07, 6-16-08, 8-2-09, 7-8-10, 7-3-11, 6-25-12, 6-18-13, 6-10-14, Amended by Florida Register Volume 41, Number 097, May 19, 2015 effective 6/2/2015, Amended by Florida Register Volume 42, Number 086, May 3, 2016 effective 5/18/2016, Amended by Florida Register Volume 43, Number 095, May 16, 2017 effective 5/30/2017, Amended by Florida Register Volume 44, Number 138, July 17, 2018 effective 8/1/2018, Amended by Florida Register Volume 45, Number 089, May 7, 2019 effective 5/21/2019, Amended by Florida Register Volume 45, Number 172, September 4, 2019 effective 9/17/2019, Amended by Florida Register Volume 46, Number 127, June 30, 2020 effective 7/16/2020, Amended by Florida Register Volume 47, Number 110, June 8, 2021 effective 6/23/2021, Amended by Florida Register Volume 48, Number 149, August 2, 2022 effective 8/18/2022, Amended by Florida Register Volume 49, Number 124, June 27, 2023 effective 7/12/2023, Amended by Florida Register Volume 50, Number 143, July 23, 2024 effective 8/5/2024.New 9-20-99, Amended 7-3-00, 9-17-01, 7-17-02, 7-2-03, 7-29-04, 7-17-05, 7-6-06, 7-17-07, 6-16-08, 8-2-09, 7-8-10, 7-3-11, 6-25-12, 6-18-13, 6-10-14, 6-2-15, 5-18-16, 5-30-17, 8-1-18, 5-21-19, 9-17-19, 7-16-20, 6-23-21, 8-18-22, 7-12-23.