2005 Citizens Property Insurance Corporation Emergency Assessment What

2005 Citizens Property Insurance Corporation Emergency Assessment

What is the Emergency Assessment (EA)? – Per Florida Statue 627. 351(6) Citizens may levy an Emergency Assessment when Citizens incurs a deficit in any year and that deficit exceeds the amount to be collected by the Regular Assessment. 2

What is the amount of the Emergency Assessment? The total dollar amount is $887, 502, 331 to be collected over a 10 year period. 1 Equates to an annual 1. 4% surcharge for policies issued or renewed on or after 7/1/2007. 2 1 See slide 4 for the detail of Citizens’ 2005 Deficit by account 2 The percentage rate may vary each year, depending upon the previous years collections and changes to the Direct Written Premium base 3

Citizens 2005 Deficit Recap Account 2005 Deficit Application of $715 M Legislative Appropriation 2005 Regular Assessment Remaining Deficit Emergency Assessment PLA 87, 180, 761 (87, 180, 761) 0 0 0 CLA 4, 564, 398 (4, 564, 398) 0 0 0 HRA 1, 673, 836, 269 (623, 254, 841) (163, 079, 097) 887, 502, 331 (887, 502, 331) Totals 1, 765, 581, 428 (715, 000) (163, 079, 097) 887, 502, 331 (887, 502, 331) 4

Who will pay Citizens? All policyholders who purchase a policy in the subject lines of business pay through their admitted carriers or the Florida Surplus Lines Service Office. 5

Subject Lines of Business Insurance written by assessable insurers or procured by assessable insured's on real or personal property, as defined in s. 624. 604, including insurance for fire, industrial fire, allied lines, farm owners multiperil, homeowners multiperil, commercial multiperil, and mobile homes, and including liability coverage on all such insurance, but excluding inland marine as defined in s. 624. 607(3) and excluding vehicle insurance as defined in s. 624. 605(1), other than insurance on mobile homes used as permanent dwellings. 6

What Premiums are Included? Direct Written Premium, including endorsement premium for each subject line of business 1 1 See slide 8 for a detail listing of the subject lines of business 7

What are the Subject Lines of Business? Lines of Business Annual Statement Cross Reference (Page 20. FL, Statutory Page 14) Fire Line 1 Allied Lines Line 2. 1 Farm owners Multi-Peril Line 3 Homeowners Multi-Peril Line 4 Commercial Multi-Peril (non-liability portion) Line 5. 1 Commercial Multi-Peril (liability portion) Line 5. 2 Earthquake Premiums Line 12 Mobile Home Premiums Only Reported under Line 21. 1 Aggregate Other Property – only the Mobile Home Premiums reported under this category Line 33 8

When does the EA take effect and how long do we collect the EA? Beginning with policies issued or renewed on or after July 1, 2007. The 2005 EA will be collected over 10 years, as mandated by the Florida Legislature. The percentage rate to be collected may change annually, depending on the previous years collections and fluctuations to the Direct Written Premium base. 9

How is Citizens Paid? Surplus lines carriers should contact the Florida Surplus Lines Service Office for instructions on remitting the Citizens EA. All admitted carriers are to pay the EA via wire by the 15 th day following month end, beginning August 15, 2007, utilizing the wiring instructions below: s Fargo Bank : 121000248 A/C: 0001038377 Corporate Trust Wire Clearing/Robert Hedgecock ) 489 -3737 : Trust Account # 12681107 Well ABA Ben Attn: (904 10 FCC

Will Citizens require any reporting to accompany the wire? No. Citizens will obtain information from the reporting all carriers already prepare for the Florida Hurricane Catastrophe Fund reporting system, via the Office of Insurance Regulation. Remember – You pay Citizens monthly, but you need only report to the Office of Insurance Regulation quarterly. 11

Should the EA be noted on the policy or billing? Both – Citizens’ 2005 Emergency Assessment should be listed as a separate line item on both the billing invoice and the declaration page of each policy, where the direct written premium is one of the subject lines of business. 12

What happens when a policyholder refuses to pay the assessment? Florida Statute 627. 351(6)(b)3. e, states that failure to pay the Emergency Assessment shall be treated as failure to pay premium. 13

How should the EA be paid on -year policies? multi On policies rated just once during the multi-year premium period, the assessment is collected once based on the entire direct written premium. On policies that are rated annually, the EA is collected each year and based on the EA percentage in effect at each renewal period. 14