|October 30, 2012|
Previously published on October 25, 2012
The Board of Governors ("Board") of the Florida Surplus Lines Service Office ("FSLSO") met yesterday, Wednesday, October 24, 2012. The meeting was called to order by the Chairman David Holcombe.
FSLSO Executive Director Gary Pullen reviewed the proposed budget, which totals $6.8 million--a 17 percent decrease from the 2012 budget. The proposed 2013 budget had been recommended by the Budget Committee at its October 23 meeting.
The 2012 budget included projections for the operation of the Nonadmitted Insurance Multi-State Agreement ("NIMA") Clearinghouse. At the time the 2012 budget was approved, 12 states were members of NIMA. Currently, only six states are members.
The Board also discussed the FSLSO service fee, which is used to fund FSLSO operations and activities. The current fee is 0.1 percent of net premium. It was noted that the fee was reduced in 2007, so that the FSLSO could spend down its unencumbered reserves to fund part of its operations. The Board approved raising the service fee to 0.2 percent.
Both the 2013 budget and the service fee issue will ultimately need to be approved by the Florida Office of Insurance Regulation ("OIR").
Executive Director Gary Pullen then presented the Executive Director's Report. He stated that the OIR had just recently completed an examination of the FSLSO and is beginning to write its written report. In the exit interview, the OIR did not indicate that there were any concerns, so Mr. Pullen is expecting a positive exam report.
Mr. Pullen presented a draft legislative proposal to the Board. The proposal would remove sections (1) and (2) from s. 626.931, F.S., and would eliminate the requirement for the agent affidavit. Mr. Pullen indicated that the agent affidavit required by this section is no longer necessary. Mr. Pullen requested Board approval to pursue legislation during the 2013 Regular Session. The Board moved to pursue such legislation.
Mr. Pullen also presented the Surplus Lines Clearinghouse Report, which details the activities of the Clearinghouse from July 1, 2012 through September 30, 2012. In that time period, there are 225 registered reporting entities and 509 transactions were processed. Over $31 million in premium was reported and $1.4 million in taxes, fees and assessments were processed and invoiced. In addition, $95,235.45 in clearinghouse transaction fees were processed and invoiced.
FSLSO Chief Financial Officer Jim Godfrey presented the financial report for the nine months ending September 30, 2012. As of September 30, 2012, the FSLSO had total liabilities and net assets of approximately $24.6 million. It also had total reported premium of approximately $3.3 billion through September 30, 2012. It was noted that there has been a drop in the amount of independently procured coverage ("IPC") premium. Through September 30, 2012, the total IPC premium was $280,622,080.26, which is $129,787,925.25 less than the IPC premium reported for the same time period in 2011.
Tom Terfinko, FSLSO Assistant Director of Agent and Insurer Services, presented the FSLSO's third quarter report, which outlined the organization's marketplace monitoring, assistance, outreach and education activities.
With no other business before the Board, the meeting was adjourned.