THE BILL ITSELF
SB 1448
Florida Hurricane Catastrophe Fund
Florida Senate - 2026 SB 1448 By Senator DiCeglie 18-00809-26 20261448__
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A bill to be entitled
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An act relating to the Florida Hurricane Catastrophe
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Fund; amending s. 215.555, F.S.; revising the
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definition of the term “retention”; requiring
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reimbursement contracts to contain a promise by the
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State Board of Administration to reimburse the insurer
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for applicable loss adjustment expenses; requiring
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that, for contracts and rates effective on or after a
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specified date, the loss adjustment expense included
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be a specified amount; requiring that the hurricane
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loss portion of the formula for determining the
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actuarially indicated premium to be paid to the fund
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be determined in a specified manner; authorizing,
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rather than requiring, such formula to provide for a
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cash build-up factor; deleting obsolete provisions;
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requiring the cash build-up factor to be zero in a
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specified contract year; providing an effective date.
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Be It Enacted by the Legislature of the State of Florida:
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Section 1. Paragraph (e) of subsection (2), paragraph (b)
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of subsection (4), and paragraph (b) of subsection (5) of
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section 215.555, Florida Statutes, are amended to read:
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215.555 Florida Hurricane Catastrophe Fund.—
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(2) DEFINITIONS.—As used in this section:
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(e) “Retention” means the amount of losses below which an
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insurer is not entitled to reimbursement from the fund. An
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insurer’s retention shall be calculated as follows:
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1. The board shall calculate and report to each insurer the
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retention multiples for that year. For the contract year
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beginning June 1, 2026 2005 , the retention multiple must shall
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be equal to $4.5 billion divided by the total estimated
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reimbursement premium for the contract year; for subsequent
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years, the retention multiple shall be equal to $4.5 billion,
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adjusted based upon the reported exposure for the contract year
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occurring 2 years before the particular contract year to reflect
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the percentage growth in exposure to the fund for covered
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policies since 2004, divided by the total estimated
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reimbursement premium for the contract year. Total reimbursement
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premium for purposes of the calculation under this subparagraph
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shall be estimated using the assumption that all insurers have
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selected the 90-percent coverage level .
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2. The retention multiple as determined under subparagraph
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1. shall be adjusted to reflect the coverage level elected by
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the insurer. For insurers electing the 90-percent coverage
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level, the adjusted retention multiple is 100 percent of the
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amount determined under subparagraph 1. For insurers electing
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the 75-percent coverage level, the retention multiple is 120
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percent of the amount determined under subparagraph 1. For
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insurers electing the 45-percent coverage level, the adjusted
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retention multiple is 200 percent of the amount determined under
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subparagraph 1.
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3. An insurer shall determine its provisional retention by
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multiplying its provisional reimbursement premium by the
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applicable adjusted retention multiple and shall determine its
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actual retention by multiplying its actual reimbursement premium
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by the applicable adjusted retention multiple.
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4. For insurers who experience multiple covered events
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causing loss during the contract year, beginning June 1, 2005,
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each insurer’s full retention shall be applied to each of the
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covered events causing the two largest losses for that insurer.
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For each other covered event resulting in losses, the insurer’s
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retention shall be reduced to one-third of the full retention.
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The reimbursement contract shall provide for the reimbursement
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of losses for each covered event based on the full retention
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with adjustments made to reflect the reduced retentions on or
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after January 1 of the contract year provided the insurer
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reports its losses as specified in the reimbursement contract.
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(4) REIMBURSEMENT CONTRACTS.—
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(b)1. The contract shall contain a promise by the board to
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reimburse the insurer for 45 percent, 75 percent, or 90 percent
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of its losses and applicable loss adjustment expenses from each
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covered event in excess of the insurer’s retention , plus 5
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percent of the reimbursed losses to cover loss adjustment
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expenses . For contracts and rates effective on or after June 1,
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2026 2019 , the loss adjustment expense included reimbursement
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must be the lesser of 15 10 percent of the total subject losses
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before reimbursement or the total subject actual loss adjustment
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expenses the reimbursed losses .
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2. The insurer must elect one of the percentage coverage
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levels specified in this paragraph and may, upon renewal of a
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reimbursement contract, elect a lower percentage coverage level
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if no revenue bonds issued under subsection (6) after a covered
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event are outstanding, or elect a higher percentage coverage
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level, regardless of whether or not revenue bonds are
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outstanding. All members of an insurer group must elect the same
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percentage coverage level. Any joint underwriting association,
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risk apportionment plan, or other entity created under s.
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627.351 must elect the 90-percent coverage level.
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3. The contract shall provide that reimbursement amounts
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shall not be reduced by reinsurance paid or payable to the
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insurer from other sources.
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(5) REIMBURSEMENT PREMIUMS.—
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(b) The State Board of Administration shall select an
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independent consultant to develop a formula for determining the
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actuarially indicated premium to be paid to the fund. The
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hurricane loss portion of the formula must be determined by
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averaging the results of all the catastrophe models accepted by
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the Florida Commission on Hurricane Loss Projection Methodology.
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The formula must shall specify, for each zip code or other
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limited geographical area, the amount of premium to be paid by
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an insurer for each $1,000 of insured value under covered
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policies in that zip code or other area. In establishing
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premiums, the board shall consider the coverage elected under
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paragraph (4)(b) and any factors that tend to enhance the
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actuarial sophistication of ratemaking for the fund, including
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deductibles, type of construction, type of coverage provided,
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relative concentration of risks, and other such factors deemed
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by the board to be appropriate. The formula may must provide for
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a cash build-up factor. For the 2009-2010 contract year, the
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factor is 5 percent. For the 2010-2011 contract year, the factor
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is 10 percent. For the 2011-2012 contract year, the factor is 15
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percent. For the 2012-2013 contract year, the factor is 20
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percent. For the 2013-2014 contract year and thereafter, the
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factor is 25 percent ; however, the cash build-up factor must be
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zero in the 2026-2027 contract year . The formula may provide for
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a procedure to determine the premiums to be paid by new insurers
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that begin writing covered policies after the beginning of a
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contract year, taking into consideration when the insurer starts
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writing covered policies, the potential exposure of the insurer,
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the potential exposure of the fund, the administrative costs to
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the insurer and to the fund, and any other factors deemed
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appropriate by the board. The formula must be approved by
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unanimous vote of the board. The board may, at any time, revise
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the formula pursuant to the procedure provided in this
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paragraph.
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Section 2. This act shall take effect July 1, 2026.