Fla. Stat. 215.5551
Reinsurance to Assist Policyholders program
(1)
CREATION OF THE REINSURANCE TO ASSIST POLICYHOLDERS PROGRAM.—There is created the Reinsurance to Assist Policyholders program to be administered by the State Board of Administration.(2)
DEFINITIONS.—As used in this section, the term:“Board” means the State Board of Administration.“Contract year” means the period beginning on June 1 of a specified calendar year and ending on May 31 of the following calendar year.“Covered event” means any one storm declared to be a hurricane by the National Hurricane Center, which storm causes insured losses in this state.“Covered policy” has the same meaning as in s. 215.555(2)(c).“FHCF” means the Florida Hurricane Catastrophe Fund created under s. 215.555.“Losses” has the same meaning as in s. 215.555(2)(d).“RAP” means the Reinsurance to Assist Policyholders program created by this section.“RAP insurer” means an insurer that is a participating insurer in the FHCF on June 1, 2022, which must obtain coverage under the RAP program and qualifies under subsection (5). However, any joint underwriting association, risk apportionment plan, or other entity created under s. 627.351 is not considered a RAP insurer and is prohibited from obtaining coverage under the RAP program.“RAP limit” means, for the 2022-2023 contract year, the RAP insurer’s maximum payout, which is its share of the $2 billion RAP layer aggregate limit. For the 2023-2024 contract year, for RAP insurers that are subject to participation deferral under subsection (6) and participate during the 2023-2024 contract year, the RAP limit means the RAP insurer’s maximum payout, which is its share of the total amount of the RAP program layer aggregate limit deferred from 2022-2023.“RAP qualification ratio” means:For the 2022-2023 contract year, the ratio of FHCF mandatory premium adjusted to 90 percent for RAP insurers divided by the FHCF mandatory premium adjusted to 90 percent for all insurers. The preliminary RAP qualification ratio shall be based on the 2021-2022 contract year’s company premiums, as of December 31, 2021, adjusted to 90 percent based on the 2022-2023 contract year coverage selections. The RAP qualification ratio shall be based on the reported 2022-2023 contract year company premiums, as of December 31, 2022, adjusted to 90 percent.
For the 2023-2024 contract year, the ratio of FHCF mandatory premium adjusted to 90 percent for the qualified RAP insurers that have deferred RAP coverage to 2023-2024 divided by the FHCF mandatory premium adjusted to 90 percent for all insurers. The preliminary RAP qualification ratio shall be based on the 2022-2023 contract year’s company premiums as of December 31, 2022, adjusted to 90 percent based on the 2023-2024 contract year coverage selections. The RAP qualification ratio shall be based on the reported 2023-2024 contract year company premiums as of December 31, 2023, adjusted to 90 percent.
“RAP reimbursement contract” means the reimbursement contract reflecting the obligations of the RAP program to insurers.“RAP retention” means the amount of losses below which a RAP insurer is not entitled to reimbursement under the RAP program.“Unsound insurer” means a RAP insurer determined by the Office of Insurance Regulation to be in unsound condition as defined in s. 624.80(2) or a RAP insurer placed in receivership under chapter 631.(a)
“Board” means the State Board of Administration.(b)
“Contract year” means the period beginning on June 1 of a specified calendar year and ending on May 31 of the following calendar year.(c)
“Covered event” means any one storm declared to be a hurricane by the National Hurricane Center, which storm causes insured losses in this state.(d)
“Covered policy” has the same meaning as in s. 215.555(2)(c).(e)
“FHCF” means the Florida Hurricane Catastrophe Fund created under s. 215.555.(f)
“Losses” has the same meaning as in s. 215.555(2)(d).(g)
“RAP” means the Reinsurance to Assist Policyholders program created by this section.(h)
“RAP insurer” means an insurer that is a participating insurer in the FHCF on June 1, 2022, which must obtain coverage under the RAP program and qualifies under subsection (5). However, any joint underwriting association, risk apportionment plan, or other entity created under s. 627.351 is not considered a RAP insurer and is prohibited from obtaining coverage under the RAP program.(i)
“RAP limit” means, for the 2022-2023 contract year, the RAP insurer’s maximum payout, which is its share of the $2 billion RAP layer aggregate limit. For the 2023-2024 contract year, for RAP insurers that are subject to participation deferral under subsection (6) and participate during the 2023-2024 contract year, the RAP limit means the RAP insurer’s maximum payout, which is its share of the total amount of the RAP program layer aggregate limit deferred from 2022-2023.(j)
“RAP qualification ratio” means:For the 2022-2023 contract year, the ratio of FHCF mandatory premium adjusted to 90 percent for RAP insurers divided by the FHCF mandatory premium adjusted to 90 percent for all insurers. The preliminary RAP qualification ratio shall be based on the 2021-2022 contract year’s company premiums, as of December 31, 2021, adjusted to 90 percent based on the 2022-2023 contract year coverage selections. The RAP qualification ratio shall be based on the reported 2022-2023 contract year company premiums, as of December 31, 2022, adjusted to 90 percent.For the 2023-2024 contract year, the ratio of FHCF mandatory premium adjusted to 90 percent for the qualified RAP insurers that have deferred RAP coverage to 2023-2024 divided by the FHCF mandatory premium adjusted to 90 percent for all insurers. The preliminary RAP qualification ratio shall be based on the 2022-2023 contract year’s company premiums as of December 31, 2022, adjusted to 90 percent based on the 2023-2024 contract year coverage selections. The RAP qualification ratio shall be based on the reported 2023-2024 contract year company premiums as of December 31, 2023, adjusted to 90 percent.(k)
“RAP reimbursement contract” means the reimbursement contract reflecting the obligations of the RAP program to insurers.(l)
“RAP retention” means the amount of losses below which a RAP insurer is not entitled to reimbursement under the RAP program.(m)
“Unsound insurer” means a RAP insurer determined by the Office of Insurance Regulation to be in unsound condition as defined in s. 624.80(2) or a RAP insurer placed in receivership under chapter 631.(3)
COVERAGE.—As a condition of doing business in this state, each RAP insurer shall obtain coverage under the RAP program.The board shall provide a reimbursement layer of $2 billion below the FHCF retention prior to the third event dropdown of the FHCF retention set forth in s. 215.555(2)(e). Subject to the mandatory notice provisions in subsection (5), the board shall enter into a RAP reimbursement contract with each eligible RAP insurer writing covered policies in this state to provide to the insurer the reimbursement described in this section.(a)
As a condition of doing business in this state, each RAP insurer shall obtain coverage under the RAP program.(b)
The board shall provide a reimbursement layer of $2 billion below the FHCF retention prior to the third event dropdown of the FHCF retention set forth in s. 215.555(2)(e). Subject to the mandatory notice provisions in subsection (5), the board shall enter into a RAP reimbursement contract with each eligible RAP insurer writing covered policies in this state to provide to the insurer the reimbursement described in this section.(4)
RAP REIMBURSEMENT CONTRACTS.—
The board shall issue a RAP reimbursement contract to each eligible RAP insurer which is effective:
June 1, 2022, for RAP insurers that participate in the RAP program during the 2022-2023 contract year; or
June 1, 2023, for RAP insurers that are subject to participation deferral under subsection (6) and participate in the RAP program during the 2023-2024 contract year.
The reimbursement contract shall be executed no later than:
July 15, 2022, for RAP insurers that participate in the RAP program during the 2022-2023 contract year; or
March 1, 2023, for RAP insurers that are subject to participation deferral under subsection (6) and participate in the RAP program during the 2023-2024 contract year.
If a RAP insurer fails to execute the RAP reimbursement contract by the dates required in this paragraph, the RAP insurance contract is deemed to have been executed by the RAP insurer.
For the two covered events with the largest losses, the RAP reimbursement contract must contain a promise by the board to reimburse the RAP insurer for 90 percent of its losses from each covered event in excess of the insurer’s RAP retention, plus 10 percent of the reimbursed losses to cover loss adjustment expenses. The sum of the losses and 10 percent loss adjustment expense allocation from the RAP layer may not exceed the RAP limit. Recoveries on losses in the FHCF mandatory layer shall inure to the benefit of the RAP contract layer.The RAP reimbursement contract must provide that reimbursement amounts are not reduced by reinsurance paid or payable to the insurer from other sources excluding the FHCF.The board shall calculate and report to each RAP insurer the RAP payout multiples as the ratio of the RAP industry limit of $2 billion for the 2022-2023 contract year, or the deferred limit for the 2022-2023 contract year, to the mandatory FHCF retention multiplied by the mandatory FHCF retention multiples divided by the RAP qualification ratio. The RAP payout multiple for an insurer is multiplied by the RAP insurer’s FHCF premium to calculate its RAP maximum payout. RAP payout multiples are calculated for 45 percent, 75 percent, and 90 percent FHCF mandatory coverage selections.A RAP insurer’s RAP retention is calculated as follows:The board shall calculate and report to each RAP insurer the RAP retention multiples for each FHCF coverage selection as the FHCF retention multiple minus the RAP payout multiple. The RAP retention multiple for an insurer is multiplied by the RAP insurer’s FHCF premium to calculate its RAP retention. RAP retention multiples are calculated for 45 percent, 75 percent, and 90 percent FHCF mandatory coverage selections.
The RAP industry retention for the 2022-2023 contract year is the FHCF’s industry retention minus $2 billion, prior to allocation to qualifying RAP insurers. The RAP industry retention for the 2023-2024 contract year is the FHCF’s industry retention for the 2023-2024 contract year minus the total deferred RAP limit, prior to allocation to qualifying RAP insurers.
A RAP insurer determines its actual RAP retention by multiplying its actual mandatory reimbursement FHCF premium by the RAP retention multiple.
To ensure that insurers have properly reported the losses for which RAP reimbursements have been made, the board may inspect, examine, and verify the records of each RAP insurer’s covered policies at such times as the board deems appropriate for the specific purpose of validating the accuracy of losses required to be reported under the terms and conditions of the RAP reimbursement contract.(a)1.
The board shall issue a RAP reimbursement contract to each eligible RAP insurer which is effective:June 1, 2022, for RAP insurers that participate in the RAP program during the 2022-2023 contract year; or
June 1, 2023, for RAP insurers that are subject to participation deferral under subsection (6) and participate in the RAP program during the 2023-2024 contract year.
The reimbursement contract shall be executed no later than:July 15, 2022, for RAP insurers that participate in the RAP program during the 2022-2023 contract year; or
March 1, 2023, for RAP insurers that are subject to participation deferral under subsection (6) and participate in the RAP program during the 2023-2024 contract year.
If a RAP insurer fails to execute the RAP reimbursement contract by the dates required in this paragraph, the RAP insurance contract is deemed to have been executed by the RAP insurer.(b)
For the two covered events with the largest losses, the RAP reimbursement contract must contain a promise by the board to reimburse the RAP insurer for 90 percent of its losses from each covered event in excess of the insurer’s RAP retention, plus 10 percent of the reimbursed losses to cover loss adjustment expenses. The sum of the losses and 10 percent loss adjustment expense allocation from the RAP layer may not exceed the RAP limit. Recoveries on losses in the FHCF mandatory layer shall inure to the benefit of the RAP contract layer.(c)
The RAP reimbursement contract must provide that reimbursement amounts are not reduced by reinsurance paid or payable to the insurer from other sources excluding the FHCF.(d)
The board shall calculate and report to each RAP insurer the RAP payout multiples as the ratio of the RAP industry limit of $2 billion for the 2022-2023 contract year, or the deferred limit for the 2022-2023 contract year, to the mandatory FHCF retention multiplied by the mandatory FHCF retention multiples divided by the RAP qualification ratio. The RAP payout multiple for an insurer is multiplied by the RAP insurer’s FHCF premium to calculate its RAP maximum payout. RAP payout multiples are calculated for 45 percent, 75 percent, and 90 percent FHCF mandatory coverage selections.(e)
A RAP insurer’s RAP retention is calculated as follows:The board shall calculate and report to each RAP insurer the RAP retention multiples for each FHCF coverage selection as the FHCF retention multiple minus the RAP payout multiple. The RAP retention multiple for an insurer is multiplied by the RAP insurer’s FHCF premium to calculate its RAP retention. RAP retention multiples are calculated for 45 percent, 75 percent, and 90 percent FHCF mandatory coverage selections.The RAP industry retention for the 2022-2023 contract year is the FHCF’s industry retention minus $2 billion, prior to allocation to qualifying RAP insurers. The RAP industry retention for the 2023-2024 contract year is the FHCF’s industry retention for the 2023-2024 contract year minus the total deferred RAP limit, prior to allocation to qualifying RAP insurers.A RAP insurer determines its actual RAP retention by multiplying its actual mandatory reimbursement FHCF premium by the RAP retention multiple.(f)
To ensure that insurers have properly reported the losses for which RAP reimbursements have been made, the board may inspect, examine, and verify the records of each RAP insurer’s covered policies at such times as the board deems appropriate for the specific purpose of validating the accuracy of losses required to be reported under the terms and conditions of the RAP reimbursement contract.(5)
INSURER QUALIFICATION.—An insurer is not eligible to participate in the RAP program if the board receives a notice from the Commissioner of Insurance Regulation which certifies that the insurer is in an unsound financial condition no later than:June 15, 2022, for RAP insurers that participate during the 2022-2023 contract year; or
February 1, 2023, for RAP insurers subject to participation deferral under subsection (6) that participate during the 2023-2024 contract year.
The office must make this determination based on the following factors:The insurer’s compliance with the requirements to qualify for and hold a certificate of authority under s. 624.404;
The insurer’s compliance with the applicable surplus requirements of s. 624.408;
The insurer’s compliance with the applicable risk-based capital requirements under s. 624.4085;
The insurer’s compliance with the applicable premium to surplus requirements under s. 624.4095; and
An analysis of quarterly and annual statements, including an actuarial opinion summary, and other information submitted to the office pursuant to s. 624.424.
If the board receives timely notice pursuant to paragraph (a) regarding an insurer, such insurer is disqualified from participating in the RAP program.(a)
An insurer is not eligible to participate in the RAP program if the board receives a notice from the Commissioner of Insurance Regulation which certifies that the insurer is in an unsound financial condition no later than:June 15, 2022, for RAP insurers that participate during the 2022-2023 contract year; orFebruary 1, 2023, for RAP insurers subject to participation deferral under subsection (6) that participate during the 2023-2024 contract year.(b)
The office must make this determination based on the following factors:The insurer’s compliance with the requirements to qualify for and hold a certificate of authority under s. 624.404;The insurer’s compliance with the applicable surplus requirements of s. 624.408;The insurer’s compliance with the applicable risk-based capital requirements under s. 624.4085;The insurer’s compliance with the applicable premium to surplus requirements under s. 624.4095; andAn analysis of quarterly and annual statements, including an actuarial opinion summary, and other information submitted to the office pursuant to s. 624.424.(c)
If the board receives timely notice pursuant to paragraph (a) regarding an insurer, such insurer is disqualified from participating in the RAP program.(6)
PARTICIPATION DEFERRAL.—A RAP insurer that has any private reinsurance that duplicates RAP coverage that such insurer would receive for the 2022-2023 contract year shall notify the board in writing of such duplicative coverage no later than June 30, 2022. Participation in the RAP program for such RAP insurers shall be deferred until the 2023-2024 contract year.A new participating insurer that begins writing covered policies in this state after June 1, 2022, is deemed to defer its RAP coverage to the 2023-2024 contract year.(a)
A RAP insurer that has any private reinsurance that duplicates RAP coverage that such insurer would receive for the 2022-2023 contract year shall notify the board in writing of such duplicative coverage no later than June 30, 2022. Participation in the RAP program for such RAP insurers shall be deferred until the 2023-2024 contract year.(b)
A new participating insurer that begins writing covered policies in this state after June 1, 2022, is deemed to defer its RAP coverage to the 2023-2024 contract year.(7)
RAP PREMIUMS.—Premiums may not be charged for participation in the RAP program.(8)
CLAIMS-PAYING CAPACITY.—The RAP program shall not affect the claims-paying capacity of the FHCF as provided in s. 215.555(4)(c)1.(9)
INSOLVENCY OF RAP INSURER.—The RAP reimbursement contract shall provide that in the event of an insolvency of a RAP insurer, the RAP program shall pay reimbursements directly to the applicable state guaranty fund for the benefit of policyholders in this state of the RAP insurer.If an authorized insurer or the Citizens Property Insurance Corporation accepts an assignment of an unsound RAP insurer’s RAP contract, the FHCF shall apply the unsound RAP insurer’s RAP contract to such policies and treat the authorized insurer or the Citizens Property Insurance Corporation as if it were the unsound RAP insurer for the remaining term of the RAP contract, with all rights and duties of the unsound RAP insurer beginning on the date it provides coverage for such policies.(a)
The RAP reimbursement contract shall provide that in the event of an insolvency of a RAP insurer, the RAP program shall pay reimbursements directly to the applicable state guaranty fund for the benefit of policyholders in this state of the RAP insurer.(b)
If an authorized insurer or the Citizens Property Insurance Corporation accepts an assignment of an unsound RAP insurer’s RAP contract, the FHCF shall apply the unsound RAP insurer’s RAP contract to such policies and treat the authorized insurer or the Citizens Property Insurance Corporation as if it were the unsound RAP insurer for the remaining term of the RAP contract, with all rights and duties of the unsound RAP insurer beginning on the date it provides coverage for such policies.(10)
VIOLATIONS.—Any violation of this section or of rules adopted under this section constitutes a violation of the insurance code.(11)
LEGAL PROCEEDINGS.—The board is authorized to take any action necessary to enforce the rules, provisions, and requirements of the RAP reimbursement contract, required by and adopted pursuant to this section.(12)
RULEMAKING.—The board may adopt rules to implement this section. In addition, the board may adopt emergency rules, pursuant to s. 120.54, at any time, as are necessary to implement this section for the 2022-2023 fiscal year. The Legislature finds that such emergency rulemaking power is necessary in order to address a critical need in the state’s problematic property insurance market. The Legislature further finds that the uniquely short timeframe needed to effectively implement this section for the 2022-2023 fiscal year requires that the board adopt rules as quickly as practicable. Therefore, in adopting such emergency rules, the board need not make the findings required by s. 120.54(4)(a). Emergency rules adopted under this section are exempt from s. 120.54(4)(c) and shall remain in effect until replaced by rules adopted under the nonemergency rulemaking procedures of chapter 120, which must occur no later than July 1, 2023.(13)
APPROPRIATION.—Within 60 days after a covered event, the board shall submit written notice to the Executive Office of the Governor if the board determines that funds from the RAP program coverage established by this section will be necessary to reimburse RAP insurers for losses associated with the covered event. The initial notice, and any subsequent requests, must specify the amount necessary to provide RAP reimbursements. Upon receiving such notice, the Executive Office of the Governor shall instruct the Chief Financial Officer to draw a warrant from the General Revenue Fund for a transfer to the board for the RAP program in the amount requested. The Executive Office of the Governor shall provide written notification to the chair and vice chair of the Legislative Budget Commission at least 3 days before the effective date of the warrant. Cumulative transfers authorized under this paragraph may not exceed $2 billion.If general revenue funds are transferred to the board for the RAP program under paragraph (a), the board shall submit written notice to the Executive Office of the Governor that funds will be necessary for the administration of the RAP program and post-event examinations for covered events that require RAP coverage. The initial notice, and any subsequent requests, must specify the amount necessary for administration of the RAP program and post-event examinations. Upon receiving such notice, the Executive Office of the Governor shall instruct the Chief Financial Officer to draw a warrant from the General Revenue Fund for a transfer to the board for the RAP program in the amount requested. The Executive Office of the Governor shall provide written notification to the chair and vice chair of the Legislative Budget Commission at least 3 days before the effective date of the warrant. Cumulative transfers authorized under this paragraph may not exceed $5 million.No later than January 31, 2023, and quarterly thereafter, the board shall submit a report to the Executive Office of the Governor, the President of the Senate, and the Speaker of the House of Representatives detailing any reimbursements of the RAP program, all loss development projections, the amount of RAP reimbursement coverage deferred until the 2023-2024 contract year, and detailed information about administrative and post-event examination expenditures.(a)
Within 60 days after a covered event, the board shall submit written notice to the Executive Office of the Governor if the board determines that funds from the RAP program coverage established by this section will be necessary to reimburse RAP insurers for losses associated with the covered event. The initial notice, and any subsequent requests, must specify the amount necessary to provide RAP reimbursements. Upon receiving such notice, the Executive Office of the Governor shall instruct the Chief Financial Officer to draw a warrant from the General Revenue Fund for a transfer to the board for the RAP program in the amount requested. The Executive Office of the Governor shall provide written notification to the chair and vice chair of the Legislative Budget Commission at least 3 days before the effective date of the warrant. Cumulative transfers authorized under this paragraph may not exceed $2 billion.(b)
If general revenue funds are transferred to the board for the RAP program under paragraph (a), the board shall submit written notice to the Executive Office of the Governor that funds will be necessary for the administration of the RAP program and post-event examinations for covered events that require RAP coverage. The initial notice, and any subsequent requests, must specify the amount necessary for administration of the RAP program and post-event examinations. Upon receiving such notice, the Executive Office of the Governor shall instruct the Chief Financial Officer to draw a warrant from the General Revenue Fund for a transfer to the board for the RAP program in the amount requested. The Executive Office of the Governor shall provide written notification to the chair and vice chair of the Legislative Budget Commission at least 3 days before the effective date of the warrant. Cumulative transfers authorized under this paragraph may not exceed $5 million.(c)
No later than January 31, 2023, and quarterly thereafter, the board shall submit a report to the Executive Office of the Governor, the President of the Senate, and the Speaker of the House of Representatives detailing any reimbursements of the RAP program, all loss development projections, the amount of RAP reimbursement coverage deferred until the 2023-2024 contract year, and detailed information about administrative and post-event examination expenditures.(14)
EXPIRATION DATE.—If no general revenue funds have been transferred to the board for the RAP program under subsection (13) by June 30, 2025, this section expires on July 1, 2025. If general revenue funds have been transferred to the board for the RAP program under subsection (13) by June 30, 2025, this section expires on July 1, 2029, and all unencumbered RAP program funds shall be transferred by the board back to the General Revenue Fund unallocated.
Source:
Section 215.5551 — Reinsurance to Assist Policyholders program, https://www.flsenate.gov/Laws/Statutes/2024/0215.5551 (accessed Aug. 7, 2025).