Florida – Emergency Insurance Assessment

Due to the unprecedented hurricane seasons of 2004 and 2005, the Florida Hurricane Catastrophe Fund has exhausted nearly all reserves accumulated since 1993. To rebuild its hurricane emergency funds, the state of Florida has issued an Emergency Order requiring all licensed property and casualty insurance companies, including mortgage guaranty insurers, to collect from Florida policy holders a special assessment of 1% of direct written premiums as of January 1, 2007. Depending on when their systems are updated, the special assessment may appear as ‘Surcharge' and will be included in the total amount due.

This assessment will apply to both new and renewal premiums on insured loans (including hazard, flood and MI) secured by properties located in Florida. The initial assessment period is for one year; however, Florida has the option to renew it. The assessment will appear as follows:

The insurance commitment and certificates for loans on properties located in Florida will include the 1% assessment effective January 1, 2007. Bills for premiums that are due and payable January 1, 2007 will include the 1% assessment.
The special assessment is required for all Florida loans that close on or after January 1, 2007. If the insurance commitment/certificate is issued prior to January 1st, and the loan closes after that date, the 1% assessment will be required in addition to the total amount due as shown. The following condition will be hard-coded in the UW Portal and used by the underwriters for Florida loans underwritten prior to January 1st:

Effective 1/1/07 a 1% surcharge applies for all hazard, flood and MI insurance policies. If a loan does not close prior to 1/1/07 updated policies will be required and the loan must be satisfactorily re-underwritten.

For additional information, please refer to the website for Florida's Office of Insurance Regulation at http://www.floir.com/hurricanes/fhcf.htm.