assessments meaning
'assessments' in the context it is referenced in this wiki (and in terms of guaranty fund) seems to mean some way to raise capital from insurers with the domiciled state. Is there a better working definition of this term?
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'assessments' in the context it is referenced in this wiki (and in terms of guaranty fund) seems to mean some way to raise capital from insurers with the domiciled state. Is there a better working definition of this term?
Comments
The Florida Hurricane Catastrophe Fund assessments are charges that may be levied on insurance policyholders in Florida when the FHCF lacks sufficient funds to cover its liabilities after a major hurricane. The FHCF is a state-run reinsurance program created to help private insurance companies pay claims for catastrophic hurricane damage.
Here’s how the assessments work:
Purpose: The FHCF provides reimbursements to insurers for a portion of their hurricane-related losses. If a significant hurricane or series of hurricanes occur, causing extensive damage, the FHCF may exhaust its cash reserves.
Assessment Trigger: If the FHCF cannot meet its obligations with the funds it has on hand, it can issue bonds to raise money. To repay these bonds, the FHCF can levy an assessment (essentially a surcharge) on most property and casualty insurance policies issued in Florida, except for certain types like medical malpractice and workers' compensation.
Assessment Rate: The assessment rate is determined by the FHCF based on the amount needed to cover its shortfall. It’s typically a small percentage of the premium on affected insurance policies.
Policyholders Impacted: The assessment applies to a broad range of policyholders across the state, including homeowners, renters, automobile, and business insurance policyholders, spreading the financial burden of hurricane recovery across the entire insurance market.
This is super helpful, thank you!
Sure, good luck.