| 1 | A bill to be entitled |
| 2 | An act relating to minimum surplus requirements for |
| 3 | mortgage guaranty insurers; amending s. 635.042, F.S.; |
| 4 | authorizing the Commissioner of Insurance Regulation to |
| 5 | permit a temporary exception to certain requirements under |
| 6 | certain circumstances; revising authority of the Office of |
| 7 | Insurance Regulation to take action against a noncomplying |
| 8 | insurer under certain circumstances; providing an |
| 9 | effective date. |
| 10 |
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| 11 | Be It Enacted by the Legislature of the State of Florida: |
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| 13 | Section 1. Section 635.042, Florida Statutes, is amended |
| 14 | to read: |
| 15 | 635.042 Minimum surplus requirement.- |
| 16 | (1) A mortgage guaranty insurer shall maintain a minimum |
| 17 | surplus of not less than the greater of $4 million or 10 percent |
| 18 | of the insurer's total outstanding liabilities other than the |
| 19 | required contingency reserve. A mortgage guaranty insurer is not |
| 20 | required to have a surplus as to policyholders greater than $100 |
| 21 | million. |
| 22 | (2) A mortgage guaranty insurer must possess sufficient |
| 23 | capital and surplus so that the total outstanding aggregate |
| 24 | exposure net of reinsurance under mortgage guaranty policies |
| 25 | written by the insurer does not exceed 25 times its paid-in |
| 26 | capital, surplus, and contingency reserve combined. A mortgage |
| 27 | guaranty insurer shall disclose in the audited financial reports |
| 28 | required under s. 624.424(8), the total aggregate exposure net |
| 29 | of reinsurance under mortgage guaranty policies written by the |
| 30 | insurer. The Commissioner of Insurance Regulation may permit a |
| 31 | temporary exception to the requirements of this subsection at |
| 32 | the written request of a mortgage guaranty insurer upon a |
| 33 | finding that the mortgage guaranty insurer's financial position |
| 34 | is reasonable in relationship to the mortgage guaranty insurer's |
| 35 | aggregate insured risk and financial needs. |
| 36 | (3) If a mortgage guaranty insurer is not in compliance |
| 37 | with this section and has not been permitted an exception as |
| 38 | provided in subsection (2), the office may take any action |
| 39 | against the insurer that the office may take against an insurer |
| 40 | that is not in compliance with s. 624.408. |
| 41 | Section 2. This act shall take effect July 1, 2010. |