Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. SB 1262
Barcode 303624
LEGISLATIVE ACTION
Senate . House
Comm: WD .
04/16/2013 .
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The Committee on Banking and Insurance (Hays) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Effective June 1, 2013, paragraph (n) of
6 subsection (2), paragraph (c) of subsection (4), and paragraph
7 (d) of subsection (6) of section 215.555, Florida Statutes, are
8 amended to read:
9 215.555 Florida Hurricane Catastrophe Fund.—
10 (2) DEFINITIONS.—As used in this section:
11 (n) “Corporation” means the State Board of Administration
12 Florida Hurricane Catastrophe Fund Finance Corporation created
13 in paragraph (6)(d).
14 (4) REIMBURSEMENT CONTRACTS.—
15 (c)1. The contract must shall also provide that the
16 obligation of the board with respect to all contracts covering a
17 particular contract year shall not exceed the actual claims
18 paying capacity of the fund up to the limit specified in this
19 paragraph.
20 1. Fund limits are as follow:
21 a. For the 2013-2014 contract year, the limit is $17
22 billion.
23 b. For the 2014-2015 contract year and subsequent contract
24 years, the limit is $16 billion.
25 2. After the 2014-2015 contract year, if a limit of $17
26 billion for that contract year, unless the board determines that
27 there is sufficient estimated claims-paying capacity to provide
28 $16 $17 billion of capacity for the current contract year and an
29 additional $16 $17 billion of capacity for subsequent contract
30 years. If the board makes such a determination, the estimated
31 claims-paying capacity for the particular contract year shall be
32 determined by adding to the $16 $17 billion limit one-half of
33 the fund’s estimated claims-paying capacity in excess of $32 $34
34 billion. However, the dollar growth in the limit may not
35 increase in any year by an amount greater than the dollar growth
36 of the balance of the fund as of December 31, less any premiums
37 or interest attributable to optional coverage, as defined by
38 rule, which occurred over the prior calendar year.
39 3.2. In May and October of the contract year, the board
40 shall publish in the Florida Administrative Register Weekly a
41 statement of the fund’s estimated borrowing capacity, the fund’s
42 estimated claims-paying capacity, and the projected balance of
43 the fund as of December 31. After the end of each calendar year,
44 the board shall notify insurers of the estimated borrowing
45 capacity, estimated claims-paying capacity, and the balance of
46 the fund as of December 31 to provide insurers with data
47 necessary to assist them in determining their retention and
48 projected payout from the fund for loss reimbursement purposes.
49 In conjunction with the development of the premium formula, as
50 provided for in subsection (5), the board shall publish factors
51 or multiples that assist insurers in determining their retention
52 and projected payout for the next contract year. For all
53 regulatory and reinsurance purposes, an insurer may calculate
54 its projected payout from the fund as its share of the total
55 fund premium for the current contract year multiplied by the sum
56 of the projected balance of the fund as of December 31 and the
57 estimated borrowing capacity for that contract year as reported
58 under this subparagraph.
59 (6) REVENUE BONDS.—
60 (d) State Board of Administration Florida Hurricane
61 Catastrophe Fund Finance Corporation.—
62 1. In addition to the findings and declarations in
63 subsection (1), the Legislature also finds and declares that:
64 a. The public benefits corporation created under this
65 paragraph will provide a mechanism necessary for the cost
66 effective and efficient issuance of bonds. This mechanism will
67 eliminate unnecessary costs in the bond issuance process,
68 thereby increasing the amounts available for to pay
69 reimbursement for losses to property sustained as a result of
70 hurricane damage.
71 b. The purpose of such bonds is to fund reimbursements
72 through the Florida Hurricane Catastrophe Fund to pay for the
73 costs of construction, reconstruction, repair, restoration, and
74 other costs associated with damage to properties of
75 policyholders of covered policies due to the occurrence of a
76 hurricane.
77 c. The efficacy of the financing mechanism will be enhanced
78 by the corporation’s ownership of the assessments, by the
79 insulation of the assessments from possible bankruptcy
80 proceedings, and by covenants of the state with the
81 corporation’s bondholders.
82 2.a. The State Board of Administration Finance Corporation
83 There is created, which is a public benefits corporation and,
84 which is an instrumentality of the state, to be known as the
85 Florida Hurricane Catastrophe Fund Finance Corporation. The
86 State Board of Administration Finance Corporation is for all
87 purposes the successor to the Florida Hurricane Catastrophe Fund
88 Finance Corporation.
89 a.b. The corporation shall operate under a five-member
90 board of directors consisting of the Governor or a designee, the
91 Chief Financial Officer or a designee, the Attorney General or a
92 designee, the director of the Division of Bond Finance of the
93 State Board of Administration, and the Chief Operating Officer
94 senior employee of the State Board of Administration responsible
95 for operations of the Florida Hurricane Catastrophe Fund.
96 b.c. The corporation has all of the powers of corporations
97 under chapter 607 and under chapter 617, subject only to the
98 provisions of this subsection.
99 c.d. The corporation may issue bonds and engage in such
100 other financial transactions as are necessary to provide
101 sufficient funds to achieve the purposes of this section.
102 d.e. The corporation may invest in any of the investments
103 authorized under s. 215.47.
104 e.f. There is shall be no liability on the part of, and no
105 cause of action shall arise against, any board members or
106 employees of the corporation for any actions taken by them in
107 the performance of their duties under this paragraph.
108 3.a. In actions under chapter 75 to validate any bonds
109 issued by the corporation, the notice required by s. 75.06 must
110 shall be published in two newspapers of general circulation in
111 the state, and the complaint and order of the court shall be
112 served only on the State Attorney of the Second Judicial
113 Circuit.
114 b. The state hereby covenants with holders of bonds of the
115 corporation that the state will not repeal or abrogate the power
116 of the board to direct the Office of Insurance Regulation to
117 levy the assessments and to collect the proceeds of the revenues
118 pledged to the payment of such bonds as long as any such bonds
119 remain outstanding unless adequate provision has been made for
120 the payment of such bonds pursuant to the documents authorizing
121 the issuance of the such bonds.
122 c.4. The bonds of the corporation are not a debt of the
123 state or of any political subdivision, and neither the state nor
124 any political subdivision is liable on such bonds. The
125 corporation may not does not have the power to pledge the
126 credit, the revenues, or the taxing power of the state or of any
127 political subdivision. The credit, revenues, or taxing power of
128 the state or of any political subdivision may shall not be
129 deemed to be pledged to the payment of any bonds of the
130 corporation.
131 d.5.a. The property, revenues, and other assets of the
132 corporation; the transactions and operations of the corporation
133 and the income from such transactions and operations; and all
134 bonds issued under this paragraph and interest on such bonds are
135 exempt from taxation by the state and any political subdivision,
136 including the intangibles tax under chapter 199 and the income
137 tax under chapter 220. This exemption does not apply to any tax
138 imposed by chapter 220 on interest, income, or profits on debt
139 obligations owned by corporations other than the State Board of
140 Administration Florida Hurricane Catastrophe Fund Finance
141 Corporation.
142 e.b. All bonds of the corporation are shall be and
143 constitute legal investments without limitation for all public
144 bodies of this state; for all banks, trust companies, savings
145 banks, savings associations, savings and loan associations, and
146 investment companies; for all administrators, executors,
147 trustees, and other fiduciaries; for all insurance companies and
148 associations and other persons carrying on an insurance
149 business; and for all other persons who are now or may hereafter
150 be authorized to invest in bonds or other obligations of the
151 state and are shall be and constitute eligible securities to be
152 deposited as collateral for the security of any state, county,
153 municipal, or other public funds. This sub-subparagraph shall be
154 considered as additional and supplemental authority and may
155 shall not be limited without specific reference to this sub
156 subparagraph.
157 4.6. The corporation and its corporate existence shall
158 continue until terminated by law; however, no such law shall
159 take effect as long as the corporation has bonds outstanding
160 unless adequate provision has been made for the payment of such
161 bonds pursuant to the documents authorizing the issuance of such
162 bonds. Upon termination of the existence of the corporation, all
163 of its rights and properties in excess of its obligations shall
164 pass to and be vested in the state.
165 Section 2. Except as otherwise expressly provided in this
166 act, this act shall take effect upon becoming a law.
167
168 ================= T I T L E A M E N D M E N T ================
169 And the title is amended as follows:
170 Delete everything before the enacting clause
171 and insert:
172 A bill to be entitled
173 An act relating to the Florida Hurricane Catastrophe
174 Fund; amending s. 215.555, F.S.; changing the name of
175 the Florida Hurricane Catastrophe Fund Finance
176 Corporation to the State Board of Administration
177 Finance Corporation; providing for the phase-in of
178 changes to the claims-paying capacity limits of the
179 fund; providing effective dates.