The Florida Hurricane Catastrophe Fund (”FHCF”) Advisory Council (”Council”) held a regularly scheduled meeting on March 18, 2010, during which it reviewed the 2010 FHCF Reimbursement Premium Formula.
FHCF base rates are to increase 4.76 percent due to the rapid cash build up factor moving from 5 percent to 10 percent. Aside from the change to the rapid cash build up factor, overall FHCF rates remain flat. FHCF base rate will increase 4.81 percent pending adoption of the cat fund fix legislation (SB1460 HB949), which sets the FHCF retention on the previous year’s exposure.
The cap on the additional rating classifications introduced last year will increase to 20 percent as planned. There are also changes to the rating classification relativities.
Although base rates have remained relatively flat, there are changes to FHCF rates by line of business summarized below. Territory rates as well as territory Zip Code mapping have changed.
FHCF rate changes by line of business are as follows:
Rate change by line of business (including 4.76 percent increase from change to rapid cash build-up factor)
|Condominium Unit Owners||2.67%|
Rate change by line of business (without 4.76 percent increase from rapid cash build-up factor)
|Condominium Unit Owners||-2.00%|
Guy Carpenter & Company & Company, LLC will work with affected insurance companies to help them understand how the new FHCF premium formula may impact their FHCF coverage and overall reinsurance costs.
Statements concerning, tax, accounting, legal or regulatory matters should be understood to be general observations based solely on our experience as reinsurance brokers and risk consultants, and may not be relied upon as tax, accounting, legal or regulatory advice which we are not authorized to provide. To the extent that you discuss such statements with your clients, be sure to advise your clients that all such matters should be reviewed with their own qualified advisors in these areas.