Florida regulator approves 1% assessment to cover UPC's claims
The assessment applies to all lines except for auto and will go to pay claims left by insolvent insurers.
The Florida Office of Insurance Regulations (OIR) approved a 1% emergency assessment on all covered lines, except auto, to build a fund that will be used by the Florida Insurance Guaranty Association (FIGA) to cover unsettled claims left by insolvent United Property & Casualty Insurance Co.
The FIGA had previously requested the Florida Insurance Assistance Interlocal Agency issue a bond anticipation note of $150 million bond. In turn, FIGA will issue a revenue bond to pay off the initial note and cover any future claims.
The 1% assessment would be used to pay off the revenue bond, which can’t exceed $750 million. The assessment will be collected until that debt is cleared, according to the state insurance regulator’s approval order.
Insurance companies can choose to pass the assessment onto policyholders or cover the fee themselves. If choosing the former, insurers can start collecting the 1% assessment on October 1, 2023, according to an update from the FIGA. The collected funds must then be sent to the guaranty association on a quarterly basis.
During 2022, the FIGA approved a number of assessments, including a 1.3% assessment in March that was in relation to the liquidation of St. Johns Insurance Co. In August 2022, a 0.70% assessment was approved to cover claims left unresolved following the insolvencies of Southern Fidelity Insurance Co. and Weston Property & Casualty Insurance Co.
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