exv10w12



 







Exhibit 10.12




	 	 	 	 	 
	
	 	Florida Hurricane Catastrophe Fund	 	CHARLIE CRIST

GOVERNOR
AS CHAIRMAN
	 	 	 
	 	 	ALEX SINK

CHIEF FINANCIAL OFFICER

AS TREASURER
	 	 	 
	 	 	BILL McCOLLUM
ATTORNEY GENERAL

AS SECRETARY
	 	 	 
	 	 	COLEMAN STIPANOVICH

EXECUTIVE DIRECTOR
	 






August 23, 2007




Mr. Bruce Meyer, CPA, CPCU

President & CEO

Liberty American Insurance Company

7785 66th Street North

Pinellas Park, FL 33780-8080





Florida Hurricane Catastrophe Fund

Reimbursement Contract and Addendum (s)

Effective: June 1, 2007


Dear Mr. Meyer:



We are pleased to enclose a fully executed copy of the Reimbursement
Contract and Addendum (s) for your company’s participation in the Florida
Hurricane Catastrophe Fund for the 2007/2008 contract year. Please retain
these documents in a secure location for your permanent reference.



Should you have any questions, please call me at the number below. We
appreciate your assistance in completing this documentation.



Cordially,



Holly Bertagnolli

FHCF Contracts Coordinator



Enclosure





ADMINISTERED FOR

THE STATE BOARD OF ADMINISTRATION BY

PARAGON STRATEGIC SOLUTIONS INC.

3600 AMERICAN BOULEVARD WEST, SUITE 700, MINNEAPOLIS, MINNESOTA 55431

PHONE: 800-689-FUND (3863) / FACSIMILE: 800-264-0492

















 





	 	 	 	 	 
		 	State Board of Administration
of Florida	 	CHARLIE
CRIST
GOVERNOR
AS CHAIRMAN

ALEX SINK 
CHIEF
FINANCIAL OFFICER
AS TREASURER

BILL
McCOLLUM
ATTORNEY GENERAL
AS SECRETARY

COLEMAN STIPANOVICH
EXECUTIVE DIRECTOR
	 	1801 Hermitage Boulevard-Suite 100
Tallahassee, Florida 32308
(850) 488-4406	 
	 	Post Office Box 13300
32317-3300	 





REIMBURSEMENT CONTRACT


Effective: June 1, 2007

(Contract)


between


LIBERTY AMERICAN INSURANCE COMPANY

Pinellas Park, FL
(Company)


NAIC # 10955



and


THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA)

WHICH ADMINISTERS THE FLORIDA HURRICANE CATASTROPHE FUND (FHCF)


PREAMBLE



The Legislature of the State of Florida has enacted Section 215.555, Florida Statutes “Statute”,
which directs the SBA to administer the FHCF. This Contract, consisting of the principal document
entitled Reimbursement Contract, addressing the mandatory FHCF coverage, and three numbered Addenda
addressing optional FHCF coverage, is subject to the Statute and to any administrative rule adopted
pursuant thereto, and is not intended to be in conflict therewith. All provisions in the principle
document are equally applicable to each of the three Addenda unless specifically superseded by one
of the Addenda.



In consideration of the promises set forth in this Contract, the parties agree as follows:




ARTICLE I — SCOPE OF AGREEMENT



As a condition precedent to the SBA’s obligations under this Contract, the Company, an Authorized
Insurer or an entity writing Covered Policies under Section 627.351, Florida Statutes, in the State
of Florida, shall report to the SBA in a specified format the business it writes which is described
in this Contract as Covered Policies.



The terms of this Contract shall determine the rights and obligations of the parties. This
Contract provides reimbursement to the Company under certain circumstances, as described herein,
and does not provide or extend insurance or reinsurance coverage to any person, firm, corporation
or other entity. The SBA shall reimburse the Company for its Ultimate Net Loss on Covered Policies
in excess of the



					
	 	 	 	 	 
	 	 	1	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.




 









 




Company’s Retention as a result of each Loss Occurrence commencing during the Contract Year, to the
extent funds are available, all as hereinafter defined.


ARTICLE II — PARTIES TO THE CONTRACT



This Contract is solely between the Company and the SBA which administers the FHCF. In no instance
shall any insured of the Company or any claimant against an insured of the Company, or any other
third party, have any rights under this Contract, except as provided in Article XIV. The SBA will
only disburse funds to the Company, except as provided for in Article XIV of this Contract.




ARTICLE III — TERM



This Contract shall apply to Loss Occurrences which commence during the period from 12:01 a.m.,
Eastern Time, June 1, 2007, to 12:01 a.m., Eastern Time, June 1, 2008 (Contract Year).



The Company must designate a coverage level, make the required selections, and return this fully
executed Contract (two originals) to the FHCF Administrator so that the Contract is received by the
FHCF Administrator no later than 5 p.m., Central Time, June 1, 2007. Failure to do so may result
in a referral to the Office of Insurance Regulation within the Department of Financial Services for
administrative action. Furthermore, the Company’s coverage level under this Contract will be
deemed as follows:





	(1)	 	For Companies that are a member of a National Association of Insurance Commissioners (NAIC)
group, the same coverage level selected by the other Companies of the same NAIC group shall be
deemed. If executed Contracts for none of the members of an NAIC group have been received by
the FHCF Administrator, the coverage level from the prior Contract Year shall be deemed.
	 
	(2)	 	For Companies that are not a member of an NAIC group under which other Companies are active
participants in the FHCF, the coverage level from the prior Contract Year shall be deemed.
	 
	(3)	 	For New Participants, as that term is defined in Article V(21), that are a member of an NAIC
group, the same coverage level selected by the other Companies of the same NAIC group shall be
deemed.
	 
	(4)	 	For New Participants that are not a member of an NAIC group under which other Companies are
active participants in the FHCF, the 45%, 75% or 90% coverage levels may be selected providing
that the FHCF Administrator receives executed Contracts within 30 calendar days of the
effective date of the first Covered Policy, otherwise, the 45% coverage level shall be deemed.




Pursuant to the terms of this Contract, the SBA shall not be liable for Loss Occurrences which
commence after the effective time and date of expiration or termination. Should this Contract
expire or terminate while a Loss Occurrence covered hereunder is in progress, the SBA shall be
responsible for such Loss Occurrence in progress in the same manner and to the same extent it would
have been responsible had the Contract expired the day following the conclusion of the Loss
Occurrence in progress.




ARTICLE IV — LIABILITY OF THE FHCF





	(1)	 	The SBA shall reimburse the Company, with respect to each Loss Occurrence commencing during
the Contract Year for the “Reimbursement Percentage” elected, this percentage times the amount
of Ultimate Net Loss paid by the Company in excess of the Company’s Retention, as adjusted
pursuant to Article V(28), plus 5% of the reimbursed losses for Loss Adjustment Expense
Reimbursement.
	 
	(2)	 	The Reimbursement Percentage will be 45% or 75% or 90%, at the Company’s option as elected
under Article XVIII.
	 
	(3)	 	The aggregate liability of the FHCF with respect to all Reimbursement Contracts covering this
contract year shall not exceed the limit set forth under Section 215.555(4)(c)1., Florida
Statutes. For specifics regarding loss reimbursement calculations, see section (3)(c) of
Article X herein.





					
	 	 	 	 	 
	 	 	2	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.





 









 






	(4)	 	Reimbursement amounts shall not be reduced by reinsurance paid or payable to the Company from
other sources.
	 
	(5)	 	After the end of the calendar year, the SBA shall notify insurers of the estimated Borrowing
Capacity and the Balance of the Fund as of December 31. In May and October of each year, the
SBA shall publish in the Florida Administrative Weekly a statement of the FHCF’s estimated
Borrowing Capacity and the projected Balance of the Fund as of December 31.
	 
	(6)	 	The obligation of the SBA with respect to all Contracts covering a particular Contract Year
shall not exceed the Balance of the Fund as of December 31 of that Contract Year, together
with the maximum amount the SBA is able to raise through the issuance of revenue bonds or
other means available to the SBA under Section 215.555, Florida Statutes, up to the limit in
accordance with Section 215.555(4)(c)1., Florida Statutes. The obligations and the liability
of the SBA are more fully described in Rule 19-8.013, Florida Administrative Code (F.A.C.).
If Reimbursement Premiums or earnings thereon are used for debt service in the event of a
temporary shortfall in the collection of emergency assessments, then the amount of the
Premiums or earnings thereon so used will be reimbursed to the SBA without interest when
sufficient emergency assessments are received.





ARTICLE V — DEFINITIONS





	(1)	 	Actual Claims-Paying Capacity of the FHCF
	 
	 	 	This term means the sum of the Balance of the Fund as of December 31 of a Contract Year, plus
any reinsurance purchased by the FHCF, plus the amount the SBA is able to raise through the
issuance of revenue bonds up to the limit in accordance with Section 215.555(4)(c)1. and (6),
Florida Statutes.
	 
	(2)	 	Actuarially Indicated
	 
	 	 	This term means, with respect to Premiums paid by Companies for reimbursement provided by the
FHCF, an amount determined in accordance with the definition provided in Section 215.555(2)(a),
Florida Statutes.
	 
	(3)	 	Additional Living Expense (ALE)
	 
	 	 	ALE losses covered by the FHCF are not to exceed 40 percent of the insured value of a
Residential Structure or its contents based on the coverage provided in the policy. Fair
rental value, loss of use, loss of rents, or business interruption losses are not covered by
the FHCF.
	 
	(4)	 	Administrator
	 
	 	 	This term means the entity with which the SBA contracts to perform administrative tasks
associated with the operations of the FHCF. The Administrator is Paragon Strategic Solutions
Inc., 3600 American Boulevard West, Suite 700, Minneapolis, Minnesota 55431. The telephone
number is (800) 689-3863, and the facsimile number is (800) 264-0492.
	 
	(5)	 	Authorized Insurer
	 
	 	 	This term is defined in Section 624.09(1), Florida Statutes.
	 
	(6)	 	Borrowing Capacity
	 
	 	 	This term means the amount of funds which are able to be raised by the issuance of revenue
bonds or through other financing mechanisms, less bond issuance expenses and reserves.
	 
	(7)	 	Citizens Property Insurance Corporation (Citizens)
	 
	 	 	This term means the entity formed under Section 627.351(6), Florida Statutes and refers to both
Citizens Property Insurance Corporation High Risk Account and Citizens Property Insurance
Corporation Personal Lines and Commercial Lines Accounts.
	 
	(8)	 	Contract
	 
	 	 	This term means this Reimbursement Contract for the current Contract Year.
	 
	(9)	 	Covered Event
	 
	 	 	This term means any one storm declared to be a hurricane by the National Hurricane Center,
which causes insured losses in Florida, both while it is still a hurricane and throughout any
subsequent downgrades in storm status by the National Hurricane Center. Any storm, including a
tropical storm, which does not become a hurricane is not a Covered Event.





					
	 	 	 	 	 
	 	 	3	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.




 









 






	(10)	 	Covered Policy or Covered Policies






	 	(a)	 	Covered Policy, as defined in Section 215.555(2)(c), Florida Statutes, is further
clarified to mean only that portion of a binder, policy or contract of insurance that
insures real or personal property located in the State of Florida to the extent such
policy insures a Residential Structure, as defined in definition (27) herein, or the
contents of a Residential Structure, located in the State of Florida.
	 
	 	(b)	 	Due to the specialized nature of the definition of Covered Policies, Covered
Policies are not limited to only one line of business in the Company’s annual statement
required to be filed by Section 624.424, Florida Statutes. Instead, Covered Policies are
found in several lines of business on the Company’s annual statement. Covered Policies
will at a minimum be reported in the Company’s statutory annual statement as:






	 	-   	 	Fire
	 
	 	-  	 	Allied Lines
	 
	 	-  	 	Farmowners Multiple Peril
	 
	 	-   	 	Homeowners Multiple Peril
	 
	 	-   	 	Commercial Multiple Peril (non liability portion, covering condominiums and apartments)
	 
	 	-   	 	Inland Marine






	 	 	 	Note that where particular insurance exposures, e.g. mobile homes, are reported on an
annual statement is not dispositive of whether or not the exposure is a Covered Policy.
	 
	 	(c)	 	This definition applies only to the first-party property section of a policy
pertaining strictly to the structure, its contents, appurtenant structures, or ALE
coverage.
	 
	 	(d)	 	Covered Policy also includes any collateral protection insurance policy covering
personal residences which protects both the borrower’s and the lender’s financial
interest, in an amount at least equal to the coverage for the dwelling in place under the
lapsed homeowner’s policy, if such policy can be accurately reported as required in
Section 215.555(5), Florida Statutes. A Company will be deemed to be able to accurately
report data if the required data, as specified in the Premium Formula adopted in Section
215.555(5), Florida Statutes, is available.
	 
	 	(e)	 	See Article VI of this Contract for specific exclusions.






	(11)	 	Deductible Buy-Back Policies
	 
	 	 	This term means a specific policy that provides coverage to a policyholder for some portion of
the policyholder’s deductible under a policy issued by another insurer.
	 
	(12)	 	Estimated Claims-Paying Capacity of the FHCF
	 
	 	 	This term means the sum of the projected Balance of the Fund as of December 31 of a Contract
Year, plus any reinsurance purchased by the FHCF, plus the most recent estimate of the
Borrowing Capacity of the FHCF, determined pursuant to Section 215.555(4)(c), Florida
Statutes.
	 
	(13)	 	Excess Policies
	 
	 	 	This term, for the purposes of this Contract, means a policy that provides insurance
protection for large commercial property risks that provides a layer of coverage above a
primary layer (which is insured by a different insurer) that acts much the same as a very
large deductible.
	 
	(14)	 	Florida Department of Financial Services (Department)
	 
	 	 	This term means the Florida regulatory agency, created pursuant to Section 20.121, Florida
Statutes, which is charged with regulating the Florida insurance market and administering the
Florida Insurance Code.
	 
	(15)	 	Florida Insurance Code
	 
	 	 	This term means those chapters identified in Section 624.01, Florida Statutes, which are
designated as the Florida Insurance Code.
	 
	(16)	 	Formula or the Premium Formula
	 
	 	 	This term means the Formula approved by the SBA for the purpose of determining the Actuarially
Indicated Premium to be paid to the FHCF. The Premium Formula is defined as an approach or





					
	 	 	 	 	 
	 	 	4	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.




 









 






	 	 	methodology which leads to the creation of premium rates. The resulting rates are therefore
incorporated as part of the Premium Formula.
	 
	(17)	 	Fund Balance or Balance of the Fund as of December 31
	 
	 	 	These terms mean the amount of assets available to pay claims, not including any bonding
proceeds, resulting from Covered Events which occurred during the Contract Year.
	 
	(18)	 	Insurer Group
	 
	 	 	For purposes of the coverage option election in Section 215.555(4)(b), Florida Statutes,
Insurer Group means the group designation assigned by the National Association of Insurance
Commissioners (NAIC) for purposes of filing consolidated financial statements. A Company is a
member of a group as designated by the NAIC until such Company is assigned another group
designation or is no longer a member of a group recognized by the NAIC.
	 
	(19)	 	Loss Occurrence
	 
	 	 	This term means the sum of individual insured losses incurred under Covered Policies resulting
from the same Covered Event. “Losses” means direct incurred losses under Covered Policies and
excludes Loss Adjustment Expenses.
	 
	(20)	 	Loss Adjustment Expense Reimbursement






	 	(a)	 	Loss Adjustment Expense Reimbursement shall be 5% of the reimbursed losses under
this Contract as provided in Article IV, pursuant to Section 215.555(4)(b)1., Florida
Statutes.
	 
	 	(b)	 	To the extent that loss reimbursements are limited to the Payout Multiple applied
to each Company, the 5% Loss Adjustment Expense is included in the total Payout Multiple
applied to each Company.






	(21)	 	New Participant(s)
	 
	 	 	This term means all Companies which begin writing Covered Policies on or after the beginning
of the Contract Year. A Company that removes exposure from either Citizens entity, as that
term is defined in (7) above, pursuant to an assumption agreement effective on or after June 1
and had written no other Covered Policies before June 1 is also considered a New Participant.
	 
	(22)	 	Office of Insurance Regulation
	 
	 	 	This term means that office within the Department of Financial Services and which was created
in Section 20.121(3), Florida Statutes.
	 
	(23)	 	Payout Multiple
	 
	 	 	This term means the multiple as calculated in accordance with Section 215.555(4)(c), Florida
Statutes, which is derived by dividing the single season Claims-Paying Capacity of the FHCF by
the total aggregate industry Reimbursement Premium for the FHCF for the Contract Year billed
as of December 31 of the Contract Year. The final Payout Multiple is determined once
Reimbursement Premiums have been billed as of December 31 and the amount of bond proceeds has
been determined.
	 
	(24)	 	Premium
	 
	 	 	This term means the same as Reimbursement Premium.
	 
	(25)	 	Projected Payout Multiple
	 
	 	 	The Projected Payout Multiple is used to calculate a Company’s projected payout pursuant to
Section 215.555(4)(d)2.b., Florida Statutes. The Projected Payout Multiple is derived by
dividing the estimated single season Claims-Paying Capacity of the FHCF by the estimated total
aggregate industry Reimbursement Premium for the FHCF for the Contract Year. The Company’s
Reimbursement Premium as paid to the SBA for the Contract Year is multiplied by the Projected
Payout Multiple to estimate the Company’s coverage from the FHCF for the Contract Year.
	 
	(26)	 	Reimbursement Premium
	 
	 	 	This term means the Premium determined by multiplying each $1,000 of insured value reported by
the Company in accordance with Section 215.555(5)(b), Florida Statutes, by the rate as derived
from the Premium Formula, as described in Rule 19-8.028, F.A.C.





					
	 	 	 	 	 
	 	 	5	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.




 









 






	(27)	 	Residential Structures
	 
	 	 	This term means dwelling units used as a home or residence for other than transient occupancy,
as that term is defined in Section 83.43(10), Florida Statutes. These include the primary
structure and appurtenant structures insured under the same policy and any other structures
covered under endorsements associated with a policy covering a residential structure, the
principal function of which at the time of loss was as a primary or secondary residence.
Covered Residential Structures do not include any structures listed under Article VI herein.
	 
	(28)	 	Retention
	 
	 	 	The Company’s Retention means the amount of hurricane losses under Covered Policies which must
be incurred by the Company before it is eligible for reimbursement from the FHCF.






	 	(a)	 	When the Company experiences covered losses from one or two Covered Events during
the Contract Year, the Company’s full Retention shall be applied to each of the Covered
Events.
	 
	 	(b)	 	When the Company experiences covered losses from more than two Covered Events
during the Contract Year, the Company’s full Retention shall be applied to each of the
two Covered Events causing the largest covered losses for the Company. For each other
Covered Event resulting in covered losses, the Company’s Retention shall be reduced to
one-third of its full Retention and applied to all other Covered Events.






	 	1.	 	All reimbursement of covered losses for each Covered Event shall be based
on the Company’s full Retention until January 1 of the Contract Year. Adjustments
to reflect a reduction to one-third of the full Retention shall be made as soon as
practicable after January 1 of the Contract Year provided the Company reports its
losses as specified in this Contract.
	 
	 	2.	 	Adjustments to the Company’s Retention shall be based upon its paid and
outstanding losses as reported on the Company’s Proof of Loss Reports but shall not
include incurred but not reported losses. The Company’s Proof of Loss Reports shall
be used to determine which Covered Events constitute the Company’s two largest
Covered Events, and the reduction to one-third of the full Retention shall be
applied to all other Covered Events for the Contract Year. After this initial
determination, any subsequent adjustments shall be made by the SBA only if the
quarterly loss reports reveal that loss development patterns have resulted in a
change in the order of Covered Events entitled to the reduction to one-third of the
full Retention.






	 	(c)	 	The Company’s full Retention is established in accordance with the provisions of
Section 215.555(2)(e), Florida Statutes, and shall be determined by multiplying the
Retention Multiple by the Company’s Reimbursement Premium for the Contract Year.
	 
	 	(d)	 	Once the Company’s limit of coverage has been exhausted, the Company will not be
entitled to further reimbursements.






	(29)	 	Retention Multiple






	 	(a)	 	The Retention Multiple is applied to the Company’s Reimbursement Premium to
determine the Company’s Retention. The Retention Multiple for the 2007/2008 Contract
Year shall be equal to $4.5 billion, adjusted based upon the reported exposure for the
2006/2007 Contract Year to reflect the percentage growth in exposure to the FHCF since
2004, divided by the estimated total industry Reimbursement Premium at the 90%
reimbursement percentage level for the Contract Year as determined by the SBA.
	 
	 	(b)	 	The Retention Multiple as determined under (29)(a) above shall be adjusted to
reflect the reimbursement percentage elected by the Company under this Contract as follows:






	 	1.	 	If the Company elects a 90% reimbursement percentage, the adjusted
Retention Multiple is 100% of the amount determined under (29)(a) above;
	 
	 	2.	 	If the Company elects a 75% reimbursement percentage, the adjusted
Retention Multiple is 120% of the amount determined under (29)(a) above; or
	 
	 	3.	 	If the Company elects a 45% reimbursement percentage, the adjusted
Retention Multiple is 200% of the amount determined under (29)(a) above.




 
					
	 	 	 	 	 
	 	 	6	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.





 









 






	(30)	 	Ultimate Net Loss






	 	(a)	 	This term means all losses of the Company under Covered Policies, prior to the
application of the Company’s FHCF Retention, as defined under (28) above, and
reimbursement percentage, and excluding loss adjustment expense, arising from each Loss
Occurrence during the Contract Year, provided, however, that the Company’s loss shall be
determined in accordance with the deductible level written under the policy sustaining
the loss.
	 
	 	(b)	 	Salvages and all other recoveries, excluding reinsurance recoveries, shall be first
deducted from such loss to arrive at the amount of liability attaching hereunder.
	 
	 	(c)	 	All salvages, recoveries or payments recovered or received subsequent to a loss
settlement under this Contract shall be applied as if recovered or received prior to the
aforesaid settlement and all necessary adjustments shall be made by the parties hereto.
	 
	 	(d)	 	Nothing in this clause shall be construed to mean that losses under this Contract
are not recoverable until the Company’s Ultimate Net Loss has been ascertained.
	 
	 	(e)	 	The SBA shall be subrogated to the rights of the Company to the extent of its
reimbursement of the Company. The Company agrees to assist and cooperate with the SBA in
all respects as regards such subrogation. The Company further agrees to undertake such
actions as may be necessary to enforce its rights of salvage and subrogation, and its
rights, if any, against other insurers as respects any claim, loss, or payment arising
out of a Covered Event.





ARTICLE VI — EXCLUSIONS



This Contract does not provide reimbursement for:





	(1)	 	Any losses not defined as being within the scope of a Covered Policy.
	 
	(2)	 	Any policy which excludes wind or hurricane coverage.
	 
	(3)	 	Any Excess Policy or Deductible Buy-Back Policy that requires individual ratemaking.
	 
	(4)	 	Any liability of the Company attributable to losses for fair rental value, loss of rent or
rental income, or business interruption.
	 
	(5)	 	Any collateral protection policy that does not meet the definition of Covered Policy as
defined in Article V(10)(d) herein.
	 
	(6)	 	Any reinsurance assumed by the Company.
	 
	(7)	 	Any exposure for: hotels, motels, timeshares, or other similar structures that are rented
out daily, weekly, or monthly; homeowner associations, if no habitational structures are
insured under the policy; and shelters, camps or retreats.
	 
	(8)	 	Commercial healthcare facilities and nursing homes; however, a nursing home which is an
integral part of a retirement community consisting primarily of habitational structures that
are not nursing homes will not be subject to this exclusion.
	 
	(9)	 	Any exposure under commercial policies covering only appurtenant structures or structures
that do not function as a habitational structure (e.g. a policy covering only the pool of an
apartment complex).
	 
	(10)	 	Personal contents in a commercial storage facility covered under a policy that covers only
those personal contents.
	 
	(11)	 	Policies covering only Additional Living Expense.
	 
	(12)	 	Any exposure for barns or barns with apartments.
	 
	(13)	 	Any exposure for builders risk coverage or new residential structures still under
construction.
	 
	(14)	 	Any exposure described as a vacant property under a commercial policy.
	 
	(15)	 	Any exposure for recreational vehicles or boats (including boat related equipment) requiring
licensing and written on a separate policy or endorsement.
	 
	(16)	 	Any liability of the Company for extra contractual obligations and excess of original policy
limits liabilities.





					
	 	 	 	 	 
	 	 	7	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.




 









 






	(17)	 	Losses in excess of the sum of the Balance of the Fund as of December 31 of the Contract Year
and the amount the SBA is able to raise through the issuance of revenue bonds or by the use of
other financing mechanisms, up to the limit pursuant to Section 215.555(4)(c), Florida
Statutes.
	 
	(18)	 	Any liability assumed by the Company from Pools, Associations, and Syndicates. Exception:
Covered Policies assumed from Citizens under the terms and conditions of an executed
assumption agreement between the Authorized Insurer and Citizens are covered by this Contract.
	 
	(19)	 	All liability of the Company arising by contract, operation of law, or otherwise, from its
participation or membership, whether voluntary or involuntary, in any insolvency fund.
“Insolvency fund” includes any guaranty fund, insolvency fund, plan, pool, association, fund
or other arrangement, howsoever denominated, established or governed, which provides for any
assessment of or payment or assumption by the Company of part or all of any claim, debt,
charge, fee, or other obligation of an insurer, or its successors or assigns, which has been
declared by any competent authority to be insolvent, or which is otherwise deemed unable to
meet any claim, debt, charge, fee or other obligation in whole or in part.
	 
	(20)	 	Any liability of the Company for loss or damage caused by or resulting from nuclear reaction,
nuclear radiation, or radioactive contamination from any cause, whether direct or indirect,
proximate or remote, and regardless of any other cause or event contributing concurrently or
in any other sequence to the loss.
	 
	(21)	 	The FHCF does not provide coverage for water damage which is generally excluded under
property insurance contracts and has been defined to mean flood, surface water, waves, tidal
water, overflow of a body of water, storm surge, or spray from any of these, whether or not
driven by wind.
	 
	(22)	 	Specialized Fine Arts Risks as defined in Rule 19-8.028(4)(d), F.A.C.
	 
	(23)	 	Claims for loss assessment coverage under Covered Policies with an effective date after the
date of the Covered Event for which the loss assessments are attributed.





ARTICLE VII — MANAGEMENT OF CLAIMS AND LOSSES



The Company shall investigate and settle or defend all claims and losses. All payments of claims
or losses by the Company within the terms and limits of the appropriate coverage parts of Covered
Policies shall be binding on the SBA, subject to the terms of this Contract, including the
provisions in Article XIII relating to inspection of records and examinations.




ARTICLE VIII — LOSS REIMBURSEMENT ADJUSTMENTS





	(1)	 	Offsets
	 
	 	 	The SBA reserves the right to offset amounts payable to the SBA from the Company, including
amounts payable under previous Contract Years, against any reimbursement or advance amounts due
and payable to the Company from the SBA as a result of the liability of the SBA.
	 
	(2)	 	Reimbursement Adjustments
	 
	 	 	Section 215.555(4)(d) and (e), Florida Statutes, provides the SBA with the right to seek the
return of excess loss reimbursements which have been paid to the Company along with interest
thereon. Excess loss reimbursements are those payments made to the Company by the SBA that are
in excess of the Company’s coverage under the Contract Year. Excess loss reimbursements may
result from adjustments to the Projected Payout Multiple or the Payout Multiple, incorrect
exposure (Data Call) submissions or resubmissions, incorrect calculations of Reimbursement
Premiums or Retentions, incorrect Proof of Loss Reports, incorrect calculation of reinsurance
recoveries, or subsequent readjustment of policyholder claims, including subrogation and
salvage, or any combination of the foregoing. The Company will be sent an invoice showing the
due date for adjustments along with the interest due thereon through the due date. The
applicable interest rate for interest credits, and for interest charges for adjustments beyond
the Company’s control, will be the average rate earned by the SBA for the FHCF for the first
five months of the Contract Year. The applicable interest rate for





					
	 	 	 	 	 
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	 	 	interest charges due to adjustments resulting from incorrect exposure submissions or Proof of
Loss Reports will accrue at this rate plus 5%. Interest will continue to accrue if not paid by
the due date.





ARTICLE IX — REIMBURSEMENT PREMIUM





	(1)	 	The Company shall, in a timely manner, pay the SBA its Reimbursement Premium for the Contract
Year. The Reimbursement Premium for the Contract Year shall be calculated in accordance with
Section 215.555, Florida Statutes, with any rules promulgated thereunder, and with Article
X(2).
	 
	(2)	 	Since the calculation of the Actuarially Indicated Premium assumes that the Companies will
pay their Reimbursement Premiums timely, interest charges will accrue under the following
circumstances. A Company may choose to estimate its own Premium installments. However, if
the Company’s estimation is less than the provisional Premium billed, an interest charge will
accrue on the difference between the estimated Premium and the final Premium. If a Company
estimates its first installment, the Administrator shall bill that estimated Premium as the
second installment as well, which will be considered as an estimate by the Company. No
interest will accrue regarding any provisional Premium if paid as billed by the FHCF’s
Administrator, except in the case of an estimated second installment as set forth in this
Article. Also, if a Company makes an estimation that is higher than the provisional Premium
billed but is less than the final Premium, interest will not accrue. If the Premium payment
is not received from a Company when it is due, an interest charge will accrue on a daily basis
until the payment is received. Interest will also accrue on Premiums resulting from
submissions or resubmissions finalized after December 1 of the Contract Year. An interest
credit will be applied for any Premium which is overpaid as either an estimate or as a
provisional Premium. Interest shall not be credited past December 1 of the Contract Year.
The applicable interest rate for interest credits will be the average rate earned by the SBA
for the FHCF for the first five months of the Contract Year. The applicable interest rate for
interest charges will accrue at this rate plus 5%.





ARTICLE X — REPORTS AND REMITTANCES





	(1)	 	Exposures






	 	(a)	 	If the Company writes Covered Policies before June 1 of the Contract Year, the
Company shall report to the SBA, unless otherwise provided in Rule 19-8.029, F.A.C., no
later than the statutorily required date of September 1 of the Contract Year, by ZIP Code
or other limited geographical area as specified by the SBA, its insured values under
Covered Policies as of June 30 of the Contract Year as outlined in the annual reporting of
insured values form, FHCF-D1A (Data Call) adopted for the Contract Year under Rule
19-8.029, F.A.C., and other data or information in the format specified by the SBA.
	 
	 	(b)	 	If the Company first begins writing Covered Policies on or after June 1 but prior to
December 1 of the Contract Year, the Company shall report to the SBA, no later than March
1 of the Contract Year, by ZIP Code or other limited geographical area as specified by the
SBA, its insured values under Covered Policies as of December 31 of the Contract Year as
outlined in the Supplemental Instructions for New Participants section of the Data Call
adopted for the Contract Year under Rule 19-8.029, F.A.C., and other data or information
in the format specified by the SBA.
	 
	 	(c)	 	If the Company first begins writing Covered Policies on or after December 1 but
through and including May 31 of the Contract Year, the Company shall not report its
exposure data for the Contract Year to the SBA.
	 
	 	(d)	 	The requirement that a report is due on a certain date means that the report shall be
in the physical possession of the FHCF’s Administrator in Minneapolis no later than 5 p.m.
on the due date. If the applicable due date is a Saturday, Sunday or legal holiday, then
the actual due date will be the day immediately following the applicable due date which is
not a Saturday, Sunday or legal holiday. For purposes of the timeliness of the
submission, neither the United





					
	 	 	 	 	 
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	 	 	 	States Postal Service postmark nor a postage meter date is in any way determinative.
Reports sent to the SBA in Tallahassee, Florida, will be returned to the sender. Reports
not in the physical possession of the FHCF’s Administrator by 5 p.m., Central Time, on the
applicable due date are late.
	 
	 	(e)	 	Pursuant to the provisions of Section 215.557, Florida Statutes, the reports of
insured values under Covered Policies by ZIP Code submitted to the SBA pursuant to Section
215.555, Florida Statutes, are confidential and exempt from the provisions of Section
119.07(1), Florida Statutes, and Section 24(a), Art. I of the State Constitution.






	(2)	 	Reimbursement Premium






	 	(a)	 	If the Company writes Covered Policies before June 1 of the Contract Year, the
Company shall pay the FHCF its Reimbursement Premium in installments due on or before
August 1, October 1, and December 1 of the Contract Year in amounts to be determined by
the FHCF. However, if the Company’s Reimbursement Premium for the prior Contract Year was
less than $5,000, the Company’s full provisional Reimbursement Premium, in an amount equal
to the Reimbursement Premium paid in the prior year, shall be due in full on or before
August 1 of the Contract Year. The Company will be invoiced for amounts due, if any,
beyond the provisional Reimbursement Premium payment, on or before December 1 of the
Contract Year. In addition, if a company has been placed under regulatory supervision by
a State or control of the Company has been transferred through any legal or regulatory
proceeding to a state regulator or court appointed receiver or rehabilitator (referred to
in the aggregate as “State action”), the full annual provisional Reimbursement Premium as
billed and any outstanding balances will be due and payable on August 1, or the date that
such State action occurs after August 1 of the Contract Year.
	 
	 	(b)	 	A New Participant that first begins writing Covered Policies on or after June 1 but
prior to December 1 of the Contract Year shall pay the FHCF a provisional Reimbursement
Premium of $1,000 upon execution of this Contract. The Administrator shall calculate the
Company’s actual Reimbursement Premium for the period based on its actual exposure as of
December 31 of the Contract Year, as reported on or before March 1. To recognize that New
Participants have limited exposure during this period, the actual Premium as determined by
processing the Company’s exposure data shall then be divided in half, the provisional
Premium shall be credited, and the resulting amount shall be the total Premium due for the
Company for the remainder of the Contract Year. However, if that amount is less than
$1,000, then the Company shall pay $1,000. The Premium payment is due no later than May 1
of the Contract Year. The Company’s Retention and coverage will be determined based on
the total Premium due as calculated above.
	 
	 	(c)	 	A New Participant that first begins writing Covered Policies on or after December 1
but through and including May 31 of the Contract Year shall pay the FHCF a Reimbursement
Premium of $1,000 upon execution of this Contract.
	 
	 	(d)	 	The requirement that the Reimbursement Premium is due on a certain date means that
the Premium shall be in the physical possession of the FHCF no later than 5 p.m., Eastern
Time, on the due date applicable to the particular installment. If remitted by check to
the FHCF’s Post Office Box, the check shall be physically in the Post Office Box 550261,
Tampa, FL 33655-0261, as set out on the invoice sent to the Company. If remitted by
check by hand delivery, the check shall be physically on the premises of the FHCF’s bank
in Tampa, Florida, as set out on the invoice sent to the Company. If remitted
electronically, the wire transfer shall have been completed to the FHCF’s account at its
bank in Tampa, Florida, as set out on the invoice sent to the Company. If the applicable
due date is a Saturday, Sunday or legal holiday, then the actual due date will be the day
immediately following the applicable due date which is not a Saturday, Sunday or legal
holiday. For purposes of the timeliness of the remittance, neither the United States
Postal Service postmark nor a postage meter date is in any way determinative. Premium
checks sent to the SBA in Tallahassee, Florida, or to the FHCF’s Administrator in Minneapolis,





					
	 	 	 	 	 
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	 	 	 	Minnesota, will be returned to the sender. Reimbursement Premiums not in the physical
possession of the FHCF by 5 p.m., Eastern Time, on the applicable due date are late.
	 
	 	(e)	 	Except as required by Section 215.555(7)(c), Florida Statutes, or as described in the
following sentence, Reimbursement Premiums, together with earnings thereon, received in a
given Contract Year will be used only to pay for losses attributable to Covered Events
occurring in that Contract Year or for losses attributable to Covered Events in subsequent
Contract Years and will not be used to pay for losses in prior years or for debt service
on revenue bonds. Pursuant to Section 215.555(6)(a)1., Florida Statutes, Premiums and
earnings thereon may be used for payments relating to revenue bonds in the event Emergency
Assessments are insufficient. If Premiums or earnings thereon are used for debt service,
then the amount of the Premiums or earnings thereon so used shall be returned, without
interest, to the Fund when Emergency Assessments remain available after making payment
relating to the revenue bonds and any other purposes for which Emergency Assessments were
levied.






	(3)	 	Claims and Losses






	 	(a)	 	In General






	 	1.	 	Claims and losses resulting from Loss Occurrences commencing during the
Contract Year shall be reported by the Company and reimbursed by the FHCF as provided
herein and in accordance with the Statute, this Contract, and any rules adopted
pursuant to the Statute. For a Company participating in a quota share primary
insurance agreement(s) with Citizens Property Insurance Corporation High Risk
Account, Citizens and the Company shall report only their respective portion of
losses under the quota share primary insurance agreement(s). Pursuant to Section
215.555(4)(c), Florida Statutes, the SBA is obligated to pay for losses not to exceed
the Actual Claims-Paying Capacity of the FHCF, up to the limit in accordance with
Section 215.555(4)(c)1., Florida Statutes, for any one Contract Year.
	 
	 	2.	 	If the Company is in non-compliance with Section 215.555, Florida Statutes
for any Contract Year, including deadlines for sending in Contracts, addendums or
attachments to Contracts, Data Call submissions or resubmissions, loss reports, or in
responding to SBA exam requirements, the SBA reserves the right to withhold
reimbursements or advances until such time the Company becomes compliant.






	 	(b)	 	Loss Reports






	 	1.	 	At the direction of the SBA, the Company shall report its projected
Ultimate Net Loss from each Loss Occurrence to provide information to the SBA in
determining any potential liability for possible reimbursable losses under the
Contract on the Interim Loss Report, Form FHCF-L1A, adopted for the Contract Year
under Rule 19-8.029, F.A.C. Interim Loss Reports (including subsequent Interim Loss
Reports if required by the SBA) will be due in no less than fourteen days from the
date of the notice from the SBA that such a report is required.
	 
	 	2.	 	FHCF loss reimbursements will be issued based on Ultimate Net Loss
information reported by the Company on the Proof of Loss Report, Form FHCF-L1B,
adopted for the Contract Year under Rule 19-8.029, F.A.C. To qualify for
reimbursement, the Proof of Loss Report must have the original signatures of
two executive officers authorized by the Company to sign the report. The Company
must also submit a detailed claims listing (as outlined on the Proof of Loss Report)
at the same time it submits its first Proof of Loss Report for a specific Covered
Event that qualifies the Company for reimbursement under that Covered Event, and
should be prepared to supply a detailed claims listing for any subsequent Proof of
Loss Report upon request. While a Company may submit a Proof of Loss Report
requesting reimbursement at any time following a Loss Occurrence, all Companies shall
submit a mandatory Proof of Loss Report for each Loss Occurrence no earlier than
December 1 and no later than December 31 of the Contract Year during which the
Covered Event(s) occurs using the most current data available, regardless of the
amount of Ultimate





					
	 	 	 	 	 
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	 	 	 	Net Loss or the amount of loss reimbursements or advances already received. Reports
may be faxed only if the Company does not qualify for a reimbursement.
	 
	 	3.	 	Updated Proof of Loss Reports for each Loss Occurrence are due quarterly
thereafter until all claims and losses resulting from a Loss Occurrence are fully
discharged including any adjustments to such losses due to salvage or other
recoveries, or the Company has received its full coverage under the Contract Year in
which the Loss Occurrence(s) occurred, in accordance with the following guidelines:






	 	a.	 	For quarterly Proof of Loss Reports due by 3/31, an insurer whose
losses exceed 50% of its FHCF Retention for a specific Loss Occurrence shall
submit.
	 
	 	b.	 	For quarterly Proof of Loss Reports due by 6/30, an insurer whose
losses exceed 75% of its FHCF Retention for a specific Loss Occurrence shall
submit.
	 
	 	c.	 	For quarterly Proof of Loss Reports due by 9/30 and thereafter, an
insurer whose losses exceed its FHCF Retention for a specific Loss Occurrence
shall submit.






	 	 	 	If the Company’s Retention must be recalculated as the result of an exposure
resubmission, and if the recalculated Retention changes the FHCF’s reimbursement
obligations, then the Company shall submit additional Proof of Loss Reports for
recalculation of the FHCF’s obligations.
	 
	 	4.	 	Annually thereafter, those Companies which received their full coverage
under the Contract Year in which the Loss Occurrence(s) occurred shall submit a
mandatory year-end Proof of Loss Report for each Loss Occurrence, as applicable,
using the most current data available. This Proof of Loss Report shall be filed no
earlier than December 1 and no later than December 31 of each year and shall continue
until the earlier of the expiration of the commutation period described in (3)(d)
below or until all claims and losses resulting from the Loss Occurrence are fully
discharged including any adjustments to such losses due to salvage or other
recoveries.
	 
	 	5.	 	The SBA, except as noted below, will determine and pay, within 30 days or
as soon as practicable after receiving Proof of Loss Reports, the reimbursement
amount due based on losses paid by the Company to date and adjustments to this amount
based on subsequent quarterly information. The adjustments to reimbursement amounts
shall require the SBA to pay, or the Company to return, amounts reflecting the most
recent determination of losses. The FHCF shall have the right to conduct a claims
examination prior to the issuance of any advances or reimbursements submitted by
Companies that have been placed under regulatory supervision by a State or where
control has been transferred through any legal or regulatory proceeding to a state
regulator or court appointed receiver or rehabilitator.
	 
	 	6.	 	If a Covered Event occurs during the Contract Year, but after December 31,
at the direction of the SBA, Companies shall file an Interim Loss Report within 30
days after the Covered Event and Proof of Loss Reports quarterly thereafter.
Subparagraphs 2-5 above regarding Proof of Loss Reports shall apply.
	 
	 	7.	 	All Proof of Loss Reports received will be compared with the FHCF’s
exposure data to establish the facial reasonableness of the reports. The SBA may
also review the results of current and prior Contract Year exposure and loss
examinations to determine the reasonableness of the reported losses. Except as noted
in paragraph 4. above, Companies meeting these tests for reasonableness will be
scheduled for reimbursement. Companies not meeting these tests for reasonableness
will be handled on a case-by-case basis and will be contacted to provide specific
information regarding their individual book of business. The discovery of errors in
a Company’s reported exposure under the Data Call may require a resubmission of the
current Contract Year Data Call which, as the Data Call impacts the Company’s
premium, retention, and coverage for the Contract Year, will be required before the
Company’s request for reimbursement or an advance will be fully processed by the
Administrator.





					
	 	 	 	 	 
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	 	(c)	 	Loss Reimbursement Calculations






	 	1.	 	In general, the Company’s paid Ultimate Net Losses must exceed its full
FHCF Retention for a specific Covered Event before any reimbursement is payable from
the FHCF for that Covered Event. As described in Article V(28), Retention
adjustments will be made after January 1 of the Contract Year. No interest is
payable on additional payments to the Company due to this type of Retention
adjustment. Each Company sustaining reimbursable losses will receive the amount of
reimbursement due under the Contract up to the amount of the Company’s payout. If
more than one Covered Event occurs in any one Contract Year, any reimbursements due
from the FHCF shall take into account the Company’s Retention for each Covered Event.
However, the Company’s reimbursements from the FHCF for all Covered Events occurring
during the Contract Year shall not exceed, in aggregate, the Projected Payout
Multiple or Payout Multiple, as applicable, times the individual Company’s
Reimbursement Premium for the Contract Year.
	 
	 	2.	 	In determining reimbursements under this Contract, the SBA shall reimburse
each of the Companies, including entities created pursuant to Section 627.351(6),
Florida Statutes, for the amount (if any) of reimbursement due under the individual
Company’s Contract, but not to exceed for all Loss Occurrences, an amount equal to
the Projected Payout Multiple or the Payout Multiple, as applicable, times the
individual Company’s Reimbursement Premium for the Contract Year.
	 
	 	3.	 	Reserve established. When a Covered Event occurs in a subsequent Contract
Year when reimbursable losses are still being paid for a Covered Event in a previous
Contract Year, the SBA will establish a reserve for the outstanding reimbursable
losses for the previous Contract Year, based on the length of time the losses have
been outstanding, the amount of losses already paid, the percentage of incurred
losses still unpaid, and any other factors specific to the loss development of the
Covered Events involved.






	 	(d)	 	Commutation






	 	1.	 	Not less than 36 months or more than 60 months after the end of the
Contract Year, the Company shall report to the FHCF all claims and losses, both
reported and unreported, for the Contract Year which are not finally settled and
which may be reimbursable losses under this Contract. The Company and the SBA or
their respective representatives shall attempt, by mutual agreement, to determine the
capitalized value of all claims and losses, both reported and unreported, resulting
from Loss Occurrences commencing during the Contract Year, and the Company shall
provide the SBA with a copy of a written opinion on such capitalized value by the
Company’s certifying actuary. Payment by the SBA of its portion of any amount or
amounts so mutually agreed and certified by the Company’s certifying actuary shall
constitute a complete and final release of the SBA in respect of all claims and
losses, both reported and unreported, under this Contract.
	 
	 	2.	 	If agreement on capitalized value cannot be reached within 60 days after
the Company reports its claims and losses to the FHCF, the Company and the SBA may
mutually appoint an actuary or appraiser to investigate, determine and capitalize
such claims or losses. If both parties then agree, the SBA shall pay its portion of
the amount so determined to be the capitalized value of such claims or losses.
	 
	 	3.	 	If the parties fail to agree, then any difference shall be settled by a
panel of three actuaries, one to be chosen by each party and the third by the two so
chosen. If either party does not appoint an actuary within 30 days, the other party
may appoint two actuaries. If the two actuaries fail to agree on the selection of a
third actuary within 30 days of their appointment, each of them shall name two, of
whom the other shall decline one and the decision shall be made by drawing lots. All
the actuaries shall be regularly engaged in the valuation of property claims and
losses and shall be members of the Casualty Actuarial Society and of the American
Academy of Actuaries. None of the actuaries shall be under the control of either
party to this Contract. Each party shall submit its case to its actuary





					
	 	 	 	 	 
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	 	 	 	within 30 days of the appointment of the third actuary. The decision in writing of
any two actuaries, when filed with the parties hereto, shall be final and binding on
both parties.
	 
	 	4.	 	The reasonable and customary expense of the actuaries and of the
commutation (as a result of 2. and 3. above) shall be equally divided between the two
parties. Said commutation shall take place in Tallahassee, Florida, unless some
other place is mutually agreed upon by the Company and the SBA.






	(4)	 	Advances






	 	(a)	 	In accordance with Section 215.555(4)(e), Florida Statutes, the SBA may make
advances for loss reimbursements as defined herein, at market interest rates, to the
Company in accordance with Section 215.555(4)(e), Florida Statutes. An advance is an
early reimbursement which allows the Company to continue to pay claims in a timely
manner. Advances will be made based on the Company’s paid and reported outstanding
losses for Covered Policies (excluding all incurred but not reported [IBNR] losses) as
reported on a Proof of Loss Report, and shall include Loss Adjustment Expense
Reimbursement as calculated by the FHCF. In order to be eligible for an advance, the
Company must submit its exposure data for the Contract Year as required under paragraph
(1) of this Article. Except as noted below, advances, if approved, will be made as soon
as practicable after the SBA receives a written request, signed by two officers of the
Company, for an advance of a specific amount and any other information required for the
specific type of advance under subparagraphs (c) and (e) below. All reimbursements due
to a Company shall be offset against any amount of outstanding advances plus the interest
due thereon.
	 
	 	(b)	 	For advances or excess advances, which are advances that are in excess of the
amount to which the Company is entitled, the market interest rate shall be the prime rate
as published in the Wall Street Journal on the first business day of the Contract Year.
This rate will be adjusted annually on the first business day of each subsequent Contract
Year, regardless of whether the Company executes subsequent Contracts. All interest
charged will commence on the date the SBA issues a check for an advance and will cease on
the date upon which the FHCF has received the Company’s Proof of Loss Report(s) for the
Covered Event(s) for which the Company qualifies for reimbursement(s). If such
reimbursement(s) are less than the amount of outstanding advance(s) issued to the
Company, interest will continue to accrue on the outstanding balance of the advance(s)
until subsequent Proof of Loss Reports qualify the Company for reimbursement under any
Covered Event equal to or exceeding the amount of any outstanding advance(s). Interest
shall be billed on a periodic basis. If it is determined that the Company received funds
in excess of those to which it was entitled, the interest as to those sums will not cease
on the date of the receipt of the Proof of Loss Report but will continue until the
Company reimburses the FHCF for the overpayment.
	 
	 	(c)	 	If the Company has an outstanding advance balance as of December 31 of this or any
other Contract Year, the Company is required to have an actuary certify outstanding and
incurred but not reported losses as reported on the applicable December Proof of Loss
Report.
	 
	 	(d)	 	The specific type of advances enumerated in the Section 215.555, Florida Statutes,
follow.






	 	1.	 	Advances to Companies to prevent insolvency, as defined under Article XIV
of this Contract.






	 	a.	 	Section 215.555(4)(e)1., Florida Statutes, provides that the SBA
shall advance to the Company amounts necessary to maintain the solvency of the
Company, up to 50 percent of the SBA’s estimate of the reimbursement due to the
Company.
	 
	 	b.	 	In addition to the requirements outlined in subparagraph (4)(a)
above, the requirements for an advance to a Company to prevent insolvency are
that the Company demonstrates it is likely to qualify for reimbursement and that
the immediate receipt of moneys from the SBA is likely to prevent the Company
from becoming insolvent, and the Company provides the following information:






	 	i.	 	Current assets;





					
	 	 	 	 	 
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	 	ii.	 	Current liabilities other than liabilities due to the Covered Event;
	 
	 	iii.	 	Current surplus as to policyholders;
	 
	 	iv.	 	Estimate of other expected liabilities not due to the Covered Event; and
	 
	 	v.	 	Amount of reinsurance available to pay claims for the Covered Event under
other reinsurance treaties.






	 	c.	 	The SBA’s final decision regarding an application for an advance to
prevent insolvency shall be based on whether or not, considering the totality of
the circumstances, including the SBA’s obligations to provide reimbursement for
all Covered Events occurring during the Contract Year, granting an advance is
essential to allowing the entity to continue to pay additional claims for a
Covered Event in a timely manner.






	 	2.	 	Advances to entities created pursuant to Section 627.351(6), Florida Statutes.






	 	a.	 	Section 215.555(4)(e)2., Florida Statutes, provides that the SBA
may advance to an entity created pursuant to Section 627.351(6), Florida
Statutes, up to 90% of the lesser of the SBA’s estimate of the reimbursement due
or the entity’s share of the actual aggregate Reimbursement Premium for that
Contract Year, multiplied by the current available liquid assets of the FHCF.
	 
	 	b.	 	In addition to the requirements outlined in subparagraph (4)(a)
above, the requirements for an advance to entities created pursuant to Section
627.351(6), Florida Statutes are that the entity must demonstrate to the SBA that
the advance is essential to allow the entity to pay claims for a Covered Event.






	 	3.	 	Advances to limited apportionment companies.
	 
	 	 	 	Section 215.555(4)(e)3., Florida Statutes, provides that the SBA may advance the
amount of estimated reimbursement payable to limited apportionment companies.






	 	(e)	 	In determining whether or not to grant an advance and the amount of an advance, the
SBA:






	 	1.	 	Shall determine whether its assets available for the payment of obligations
are sufficient and sufficiently liquid to fulfill its obligations to other Companies
prior to granting an advance;
	 
	 	2.	 	Shall review and consider all the information submitted by such Companies;
	 
	 	3.	 	Shall review such Companies’ compliance with all requirements of Section
215.555, Florida Statutes;
	 
	 	4.	 	Shall consult with all relevant regulatory agencies to seek all relevant
information;
	 
	 	5.	 	Shall review the damage caused by the Covered Event and when that Covered
Event occurred;
	 
	 	6.	 	Shall consider whether the Company has substantially exhausted amounts
previously advanced; and
	 
	 	7.	 	Shall consider any other factors deemed relevant.






	 	(f)	 	In situations where a Company has been placed under regulatory supervision by a
State, or where control has been transferred through any legal or regulatory proceeding to
a state regulator, court appointed receiver or rehabilitator, or a state insurance
guarantee association, all requirements of the Company outlined herein shall remain
applicable and must be met prior to the issuance of any advance of reimbursements for
which the Company may be eligible to receive under the Contract.
	 
	 	(g)	 	Any amount advanced by the SBA shall be used by the Company only to pay claims of its
policyholders for the Covered Event or Covered Events which have precipitated the
immediate need to continue to pay additional claims as they become due.






	(5)	 	Delinquent Premium Payments
	 
	 	 	Failure to submit a Premium or Premium installment when due is a violation of the terms of this
Contract and Section 215.555, Florida Statutes. Interest on late payments shall be due as set
forth in Article IX(2) of this Contract.






					
	 	 	 	 	 
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	(6)	 	Inadequate Data Submissions
	 
	 	 	If exposure data or other information required to be reported by the Company under the terms of
this Contract is not received by the FHCF in the format specified by the FHCF and is inadequate
to the extent that the FHCF requires resubmission of data, the Company will be required to pay
the FHCF a resubmission fee of $1,000. The $1,000 fee is also applicable to exposure
resubmissions made as a result of examinations of the Company’s exposure and claims data. A
resubmission of exposure data may delay the processing of the Company’s request for
reimbursement or an advance.
	 
	(7)	 	Delinquent Submissions
	 
	 	 	Failure to submit an exposure submission or resubmission, or loss reports, when due is a
violation of the terms of this Contract and Section 215.555, Florida Statutes.





ARTICLE XI — TAXES



In consideration of the terms under which this Contract is issued, the Company agrees to make no
deduction in respect of the Premium herein when making premium tax returns to the appropriate
authorities. Should any taxes be levied on the Company in respect of the Premium herein, the
Company agrees to make no claim upon the SBA for reimbursement in respect of such taxes.




ARTICLE XII — ERRORS AND OMISSIONS



Any inadvertent delay, omission, or error on the part of the SBA shall not be held to relieve the
Company from any liability which would attach to it hereunder if such delay, omission, or error had
not been made.




ARTICLE XIII — INSPECTION OF RECORDS



The Company shall allow the SBA to inspect, examine, and verify, at reasonable times, all records
of the Company relating to the Covered Policies under this Contract, including Company files
concerning claims, losses, or legal proceedings regarding subrogation or claims recoveries which
involve this Contract, including premium, loss records and reports involving exposure data on
Covered Policies. This right by the SBA to inspect, examine, and verify shall survive the
completion and closure of an exposure examination or loss examination file and the termination of
the Contract. The Company shall have no right to re-open an exposure or loss reimbursement
examination once closed and the findings have been accepted by the Company; any re-opening shall be
at the sole discretion of the SBA. All discovered errors, inadvertent omissions, and typographical
errors associated with the data reporting of insured values, discovered prior to the closing of the
file and acceptance of the examination findings by the Company, shall be corrected to reflect the
proper values. The Company shall retain its records in accordance with the requirements for
records retention regarding exposure reports and claims reports outlined herein, and in any
administrative rules adopted pursuant to Section 215.555, Florida Statutes. Companies writing
covered collateral protection policies, as defined in definition (10)(d) of Article V herein, must
be able to provide documentation that the policy covers personal residences, protects both the
borrower’s and lender’s interest, and that the coverage is in an amount at least equal to the
coverage for the dwelling in place under the lapsed homeowner’s policy.





	(1)	 	Examination Requirements for Exposure Verification
	 
	 	 	The Company shall retain complete and accurate records, in policy level detail, of all exposure
data submitted to the SBA in any Contract Year until the SBA has completed its examination of
the Company’s exposure submissions. The Company shall also retain complete and accurate records
of any completed exposure examination for any Contract Year in which the Company incurred
losses until the completion of the loss reimbursement examination for that Contract Year. The
records to be retained shall include the exam file which supports the exposure reported to the
SBA and any other information which would allow for a complete examination of the Company’s
reported exposure data. The exam file shall be prepared according to the SBA Exam File
Specifications outlined in the Data Call. The Company must also have available, at the time of
the examination, a copy of its





					
	 	 	 	 	 
	 	 	16	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.




 









 






	 	 	underwriting manual, a copy of its rating manual, and staff to respond to the questions of the
SBA or its agents. The Company is also required to retain declarations pages and policy
applications to support reported exposure. To meet the requirement that the application must
be retained, the Company may retain either the actual application or may retain the actual
application in an electronic format. A complete list of records to be retained are set forth
in Form FHCF-EAP1, adopted for the Contract Year under Rule 19-8.030, F.A.C.
	 
	(2)	 	Examination Requirements for Loss Reports
	 
	 	 	The Company shall retain complete and accurate records of all reported losses and/or advances
submitted to the SBA until the SBA has completed its examination of the Company’s
reimbursable losses. The records to be retained are set forth as part of the Proof of Loss
Report, Form FHCF-L1B, adopted for the Contract Year under Rule 19-8.029, F.A.C., and Form
FHCF-LAP1, adopted for the Contract Year under Rule 19-8.030, F.A.C. The Company must also
retain the required exposure exam file for the Contract Year in which the loss occurred, and
must have available any other information which would allow for a complete examination of the
Company’s losses.
	 
	(3)	 	Examination Procedures






	 	(a)	 	The FHCF will send an examination notice to the Company providing the commencement
date of the examination, the site of the examination, any accommodation requirements of
the examiner, and the reports and data which must be assembled by the Company and
forwarded to the FHCF upon request. The Company shall be prepared to choose one location
in which to be examined, unless otherwise specified by the SBA.
	 
	 	(b)	 	The reports and data are required to be forwarded to the FHCF as set forth in an
examination notice letter. The information is then forwarded to the examiner. If the
FHCF receives accurate and complete records as requested, the examiner will contact the
Company to inform the Company as to what policies or other documentation will be required
once the examiner is on site. Any records not required to be provided to the examiner in
advance shall be made available at the time the examiner arrives on site.
	 
	 	(c)	 	At the conclusion of the examiner’s work and the management review of the examiner’s
report, findings, recommendations, and work papers, the FHCF will forward a preliminary
draft of the examination report to the Company and require a response from the Company by
a date certain as to the examination findings and recommendations.
	 
	 	(d)	 	If the Company accepts the examination findings and recommendations, and there is no
recommendation for resubmission of the Company’s exposure data, the examination report
will be finalized and the exam file closed.
	 
	 	(e)	 	If the Company disputes the examiner’s findings, the areas in dispute will be
resolved by a meeting or a conference call between the Company and FHCF management.





	 	(f)	 	1.	 	The recommendation of a loss reimbursement examination could require the Company
to resubmit or update its loss reports or exposure data.






	 	2.	 	If the recommendation of the examiner is to resubmit the Company’s exposure
data for the Contract Year in question, then the FHCF will send the Company a letter
outlining the process for resubmission and including a deadline to resubmit. The
resubmission will include a data file to be submitted to the FHCF’s Administrator and
an exam file to be submitted to the offices of the SBA. The resubmission is also
required to be accompanied by a detailed written description of the specific changes
made to the resubmitted data. Once the resubmission is received by the FHCF’s
Administrator, the FHCF’s Administrator calculates a revised Reimbursement Premium for
the Contract Year which has been examined. The SBA shall then review the resubmission
with respect to the examiner’s findings, and accept the resubmission or contact the
Company with any questions regarding the resubmission. Once the SBA has accepted the
resubmission as a sufficient response to the examiner’s findings, the FHCF’s
Administrator will send the Company an invoice for any Reimbursement Premium and
interest due or to refund Reimbursement Premium, as the case may be. Once the
resubmission has been approved, the exam file is closed.





					
	 	 	 	 	 
	 	 	17	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.



 









 






	 	3.	 	If the recommendation of the examiner is either to resubmit the Company’s
exposure data for the Contract Year in question or giving the option to pay the
estimated Premium difference, then the FHCF will send the Company a letter outlining
the process for resubmission or for paying the estimated Premium difference and
including a deadline for the resubmission or the payment to be received by the FHCF’s
Administrator. If the Company chooses to resubmit, the same procedures outlined in
Article XIII(3)(f)2. apply.
	 
	 	4.	 	If the recommendation of the examiner is to update the Company’s Proof of Loss
Report(s) for the Contract Year under review, the FHCF will send the Company a letter
outlining the process for submitting the Proof of Loss Report(s) and including a
deadline to file. The updated Proof of Loss Report(s) will be submitted to the FHCF’s
Administrator with a copy of the Proof of Loss Report(s) and a supporting detailed
claims listing to be submitted to the offices of the SBA. The report is required to be
accompanied by a detailed written description of the specific changes made. Once the
Proof of Loss Report(s) is received by the FHCF Administrator, the FHCF’s Administrator
will calculate a revised reimbursement. The SBA shall then review the submitted Proof
of Loss Report(s) with respect to the examiner’s findings, and accept the Proof of Loss
Report(s) as filed or contact the Company with any questions. Once the SBA has
accepted the corrected Proof of Loss Report(s) as a sufficient response to the
examiner’s findings, the FHCF’s Administrator will send the Company an invoice for any
overpayments and interest due or the additional reimbursement owed the Company, as the
case may be. Once the Proof of Loss Report(s) is approved, the exam file is closed.






	 	(g)	 	If the Company continues to dispute the examiner’s findings and/or recommendations
and no resolution of the disputed matters is obtained through discussions between the
Company and FHCF management, then the process within the SBA is at an end and further
administrative remedies may be pursued under Chapter 120, Florida Statutes.
	 
	 	(h)	 	The examiner’s list of errors is made available in the examination report sent to
the Company. Given that the examination was based on a sample of the Company’s policies
or claims rather than the whole universe of the Company’s Covered Policies or reported
claims, the error list is not intended to provide a complete list of errors but is
intended to indicate what information needs to be reviewed and corrected throughout the
Company’s book of Covered Policy business or claims information to ensure more complete
and accurate reporting to the FHCF.






	(4)	 	Costs of the Examinations
	 
	 	 	The costs of the examinations shall be borne by the SBA. However, in order to remove any
incentive for a Company to delay preparations for an examination, the SBA shall be reimbursed
by the Company for any examination expenses incurred in addition to the usual and customary
costs, which additional expenses were incurred as a result of the Company’s failure, despite
proper notice, to be prepared for the examination or as a result of a Company’s failure to
provide requested information. All requested information must be complete and accurate. The
Company shall be notified of any administrative remedies which may be obtained under Chapter
120, Florida Statutes.





ARTICLE XIV — INSOLVENCY OF THE COMPANY



Company shall notify the FHCF immediately upon becoming insolvent. Pursuant to Section
215.555(4)(g), Florida Statutes, the FHCF is required to pay the “net amount of all reimbursement
moneys” due an insolvent insurer to the Florida Insurance Guaranty Association (FIGA) for the
benefit of Florida policyholders. For the purpose of this Contract, a Company is insolvent when an
order of liquidation with a finding of insolvency has been entered by a court of competent
jurisdiction. In light of the need for an immediate infusion of funds to enable policyholders of
insolvent companies to be paid for their claims, the SBA may enter into agreements with FIGA
allowing exposure and loss examinations to take place immediately without the usual notice and
response time limitations and allowing the FHCF to make loss reimbursements (net of any amounts
payable to the SBA from the Company or FIGA) to FIGA



					
	 	 	 	 	 
	 	 	18	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.



 









 






before the examinations are completed and before the response time expires for claims filing by
reinsurers and financial institutions, which have a priority interest in those funds pursuant to
Section 215.555(4)(g), Florida Statutes. Such agreements must ensure the availability of the
necessary records and adequate security must be provided so that if the FHCF determines that it
overpaid FIGA on behalf of the Company, or if claims are filed by reinsurers or financial
institutions having a priority interest in these funds, that the funds will be repaid to the FHCF
by FIGA with in a reasonable time.




ARTICLE XV — TERMINATION




The FHCF and the obligations of both parties under this Contract can be terminated only as may be
provided by law or applicable rules.



ARTICLE XVI — VIOLATIONS




Pursuant to the provisions of Section 215.555(10), Florida Statutes, any violation of the terms of
this Contract by the Company constitutes a violation of the Insurance Code of the State of the
Florida. Pursuant to the provisions of Section 215.555(11), Florida Statutes, the SBA is
authorized to take any action necessary to enforce any administrative rules adopted pursuant to
Section 215.555, Florida Statutes, and the provisions and requirements of this Contract.



ARTICLE XVII — APPLICABLE LAW





	(1)	 	Applicable Law: This Contract shall be governed by and construed according to the laws of
the State of Florida in respect of any matter relating to or arising out of this Contract.
	 
	(2)	 	Notice of Rights: Pursuant to Chapter 120, Florida Statutes, and the Uniform Rules of
Procedure, codified as Chapters 28-101 through 28-111, F.A.C., a person whose substantial
interests are affected by a decision of the SBA regarding the FHCF may request a hearing
within 21 days shall have waived his or her right to a hearing. The hearing may be a formal
hearing or an informal hearing pursuant to the provisions of Sections 120.569 and 120.57,
Florida Statutes. The petition must be filed (received) in the office of the Agency Clerk,
General Counsel’s Office, State Board of Administration of Florida, P.O. Box 13300,
Tallahassee, FL 32317-3300, within the 21 day period.





					
	 	 	 	 	 
	 	 	19	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.



 









 











ARTICLE XVIII — REIMBURSEMENT CONTRACT ELECTIONS



Reimbursement Percentage



For purposes of determining reimbursement (if any) due the Company under this Contract and in
accordance with the Statute, the Company has the option to elect a 45% or 75% or 90% reimbursement
percentage under this Contract. If the Company is a member of an NAIC group, all members must
elect the same reimbursement percentage, and the individual executing this Contract on behalf of
the Company, by placing his or her initials in the box under (a) below, affirms that the Company
has elected the same reimbursement percentage as all members of its NAIC group. If the Company is
an entity created pursuant to Section 627.351, Florida Statutes, the Company must elect the 90%
reimbursement percentage. The Company shall not be permitted to change its reimbursement
percentage during the Contract Year. The Company shall be permitted to change its reimbursement
percentage at the beginning of a new Contract Year, but may not reduce its reimbursement percentage
if a Covered Event required the issuance of revenue bonds, until the bonds have been fully repaid.



IMPORTANT NOTE: The FHCF issued revenue bonds in July of 2006 as a result of its liabilities for
Covered Events under the Contract Year effective June 1, 2005. As those bonds have not been fully
repaid, the Company may not select a Reimbursement Percentage that is less than its selection under
the prior Contract Year effective June 1, 2006.



The Reimbursement Percentage elected by the Company for the prior Contract Year effective June 1,
2006 was as follows: Liberty American Insurance Company - 90%






	(a)	 	NAIC Group Affirmation: Initial the following box if the Company is part of an NAIC Group:





/s/ TBM





	(b)	 	Reimbursement Percentage Election: The Company hereby elects the following Reimbursement
Percentage for the Contract Year from 12:01 a.m., Eastern Time, June 1, 2007, to 12:01 a.m.,
Eastern Time, June 1, 2008, (the individual executing this Contract on behalf of the Company
shall place his or her initials in the box to the left of the percentage elected for the
Company):





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 
	 	 	45	%	 	OR
	 	 

	 	 	75	%	 	OR
	 	/s/ TBM

	 	 	 	 	90	%	 	 





Reporting Exposure for a Single Structure, with a Mix of Commercial Habitational and
Commercial Non-Habitational Exposure, Written on a Commercial Policy



This section is applicable to all Companies which either have exposure for single structures
with a mix of commercial habitational and commercial non-habitational exposure written under a
Commercial Policy, or have the authority to write such policies. If the Company does not have the
authority to write this type of exposure, this section does not apply; initial the N/A box on the
next page, which completes this ARTICLE. If the Company does write, or has the authority to write,
this type of exposure, please read and complete the remainder of this ARTICLE.





					
	 	 	 	 	 
	 	 	20	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.




 








 








Commercial-Residential Class Code



If a single structure is used for both habitational and non-habitational purposes and the structure
has a commercial-residential class code (based on a classification plan on file with and reviewed
by the Administrator), the entire exposure for the structure should be reported to the FHCF under
the Data Call, and the FHCF will reimburse losses for the entire structure as well.




Commercial Non-Residential/Business Class Code



If a single structure is used for both habitational and non-habitational purposes and the structure
has a commercial non-residential or business class code (based on a classification plan on file
with and reviewed by the Administrator), the habitational portion of that structure should be
identified and reported to the FHCF under the Data Call.



However, in recognition of the unusual nature of commercial structures with incidental habitational
exposure and the hardship some companies may face in having to carve out such incidental
habitational exposure, as well as the losses to such structures, the FHCF will accommodate these
companies by allowing them to exclude the entire exposure for the single structure from their Data
Call submission, providing the following two conditions are met:





	(1)	 	The decision to not carve out and report the incidental habitational exposure shall apply to
all such structures insured by the Company; and
	 
	(2)	 	If the incidental habitational exposure is not reported to the FHCF, the Company agrees it
shall not report losses to the structure and the FHCF shall not reimburse any losses to the
structure.




Initial the CARVING box below if the Company is able to carve out and report its incidental
habitational exposure, OR, if this requirement presents a hardship, the Company must communicate
its decision to not carve out and to not report the incidental exposure by having the individual
executing this Contract on behalf of the Company placing his or her initials in the NOT CARVING box
below. If the Company does not currently write such policies, but has the authority to write such
policies after the start date of this Contract, the decision to carve or not carve out the
incidental habitational exposure must be indicated below.




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	OR
	 	/s/ TBM
	 	OR	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	CARVING
	 	 	 	NOT CARVING
	 	 	 	NA
	 	 





By initialing the CARVING or NOT CARVING box above, the Company is making an irrevocable decision
for the corresponding Contract Year Data Call submission and any subsequent resubmissions.





			
	Important Note:	 	Since this election will impact your Data Call submission, please share this
decision with the individual(s) responsible for compiling your Data Call submission.




Additional Living Expense (ALE)Written as Time Element Coverage

If your Company writes Covered Policies that provide ALE coverage on a time element basis (i.e.
coverage is based on a specific period of time as opposed to a stated dollar limit), you must
initial the ‘Yes — Time Element ALE’ box below. If your Company does not write time element ALE
coverage, initial ‘No — Time Element ALE’ box below.




	 	 	 	 	 	 	 	 	 
	 
	 	 	 	OR	 	/s/ TBM
 
	 	 
	 
	 	Yes — Time	 	 	 	No — Time	 	 
	 
	 	Element ALE	 	 	 	Element ALE	 	 





					
	 	 	 	 	 
	 	 	21	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.



 









 






ARTICLE XIX — SIGNATURES




	 	 	 	 	 	 	 
	Approved by:	 	 	 	 
	 
	 	 	 	 	 	 
	Florida Hurricane Catastrophe Fund	 	 	 	 
	 
	By:

	 	State Board of Administration of the State of Florida	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Linda Lettera / for

 

	 	7/9/07
	 	 
	 

	 	Coleman Stipanovich

Executive Director
	 	Date	 	 
	 
	 	 	 	 	 	 
	Approved as to legality:	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Thomas A. Burke / for
	 	7/9/07	 	 
	 

	 	 
Linda Lettera
	 	Date	 	 
	 

	 	General Counsel	 	 	 	 
	 

	 	FL Bar ID#311911	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ T. Bruce Meyer	 	 	 	 
	 	 	 	 	 
	Liberty American Insurance Company	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	T. Bruce Meyer, Pres. & CEO
	 	5/23/07	 	 
	 

	 	 

Name/Title
	 	Date	 	 





					
	 	 	 	 	 
	 	 	22	 	FHCF-2007K
	 	 	 	 	Rule 19-8.010 F.A.C.



 








 






	 	 	 	 	 
		 	State Board of Administration
of Florida	 	CHARLIE
CRIST
GOVERNOR
AS CHAIRMAN

ALEX SINK 
CHIEF
FINANCIAL OFFICER
AS TREASURER

BILL
McCOLLUM
ATTORNEY GENERAL
AS SECRETARY

COLEMAN STIPANOVICH
EXECUTIVE DIRECTOR
	 	1801 Hermitage Boulevard-Suite 100
Tallahassee, Florida 32308
(850) 488-4406	 
	 	Post Office Box 13300
32317-3300	 







			
	ATTENTION:	 	THIS ADDENDUM MUST BE COMPLETED, SIGNED, AND RETURNED BY ALL COMPANIES ELIGIBLE FOR
COVERAGE UNDER THIS ADDENDUM REGARDLESS OF CHOICE TO ACCEPT OR REJECT THIS OPTIONAL COVERAGE





ADDENDUM NO. 1

to

REIMBURSEMENT CONTRACT

Effective: June 1, 2007

(Contract)




between




LIBERTY AMERICAN INSURANCE COMPANY

Pinellas Park, FL

(Company)




NAIC # 10955




and



THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA) WHICH ADMINISTERS THE FLORIDA
HURRICANE CATASTROPHE FUND (FHCF)



It is Hereby Agreed, effective at 12:01 a.m., Eastern Time, June 1, 2007, that this Contract shall
be amended as follows:



ADDITIONAL COVERAGE OPTION (up to $10 million) PURSUANT TO SECTION 215.555(4)(b)4., FLORIDA
STATUTES.



Pursuant to Section 215.555(4)(b)4., Florida Statutes, certain Companies may select additional FHCF
reimbursement coverage of up to $10 million dollars. The additional premium to be charged for this
additional reimbursement coverage shall be 50 percent of the additional reimbursement coverage
provided, which shall include one prepaid full reinstatement. The additional premium shall be due
and payable in three equal installments on August 1, 2007, on October 1, 2007, and on December 1,
2007.




     The minimum retention level that must be retained associated with this additional coverage layer is
30 percent of the insurer’s surplus as of December 31, 2006, for each Covered Event. For an
insurer which began writing property insurance in 2007 and did not have a surplus as of



			
	 	 	 







			
	1
	 	FHCF-2007K

Rule 19-8.010 F.A.C















 






December 31, 2006, surplus shall be deemed to be the surplus reported to the Office of Insurance Regulation at the time the
insurer received its Certificate of Authority.



The reimbursement percentage applicable to this additional coverage shall be 100 percent, which
includes reimbursement for loss adjustment expense as provided under the Reimbursement Contract.



This additional reimbursement coverage shall be in addition to all other coverage provided by the
SBA under the Company’s Reimbursement Contract and shall be in addition to the claims-paying
capacity of the FHCF as defined in Section 215.555(4)(c)1., Florida Statutes, but only with respect
to those insurers that select the additional coverage option. Coverage provided in this additional
coverage option shall otherwise be consistent with terms and conditions as relates to the
Reimbursement Contract including, but not limited to, definitions, coverage for Covered Policies as
defined, exclusions, loss reporting, and examination procedures.



While this additional coverage shall not reduce, overlap, or duplicate coverage otherwise provided
for in the Reimbursement Contract or offset any co-payments, the amount of coverage selected herein
is irrevocable. Any amount of additional coverage selected herein that would in effect overlap
FHCF coverage otherwise provided for in the Reimbursement Contract, or any other Addenda to the
Reimbursement Contract, shall be deemed by the FHCF to shift above the highest level of coverage
otherwise provided by the FHCF.



The claims-paying capacity with respect to all other participating insurers, including eligible
Companies that do not select the additional coverage option, shall be limited to their
reimbursement premium’s proportionate share of the actual claims-paying capacity as defined in
Section 215.555(4)(c)1., Florida Statutes and as provided for under the terms of the Reimbursement
Contract, plus any coverage provided under any other Addenda to the Reimbursement Contract.



The optional coverage provided in this Addendum expires on May 31, 2008 and is not renewable.



ALL COMPANIES EXECUTING A REIMBURSEMENT CONTRACT AND ELIGIBLE FOR THIS ADDITIONAL COVERAGE MUST
INDICATE BELOW THE AMOUNT OF ADDITIONAL COVERAGE SELECTED, IF ANY.



If your Company does not wish to purchase the additional coverage under this Addendum, print “No
Coverage” on the line below and initial the box.




	 	 	 	 	 
	 	 	 
	 	No Coverage 	 	                   /s/ TBM
 	 
	 	 	 
	 	 	 
	 


If your Company is eligible for the coverage under this Addendum and elects to purchase this
coverage, indicate the amount of additional coverage up to $10 million (there is no additional
coverage available in excess of $10 million) on the line below:




$                            




			
	 	 	 







			
	2
	 	FHCF-2007K

Rule 19-8.010 F.A.C















 







IF THIS ADDENDUM NO. 1 IS RETURNED WITHOUT THE BLANK SPACE IMMEDIATELY ABOVE FILLED IN WITH A
DOLLAR AMOUNT, IT SHALL BE DEEMED BY THE STATE BOARD OF ADMINISTRATION TO BE A CHOICE TO REJECT THE
ADDITIONAL COVERAGE.




	 	 	 	 	 
	 	 	 
	
 	 	 
	Liberty American Insurance Company 	 	 
	 	 	 
	 



	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ T. Bruce Meyer
 

 T. Bruce Meyer, Pres. & CEO
Name/Title
	 	 	 	5-23-07
 

Date
	 	 






Approved by:




Florida Hurricane Catastrophe Fund


By: State Board of Administration of the State of Florida




	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Linda Lettera / for
 

Coleman Stipanovich

Executive Director
	 	 	 	7/9/07
 

Date
	 	 






Approved as to legality:




	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Thomas A. Burke / for
 

Linda Lettera

General Counsel

FL Bar ID#311911
	 	 	 	7/9/07
 

Date
	 	 






			
	 	 	 






			
	3
	 	FHCF-2007K

Rule 19-8.010 F.A.C















 








	 	 	 	 	 
		 	State Board of Administration
of Florida	 	CHARLIE
CRIST
GOVERNOR
AS CHAIRMAN

ALEX SINK 
CHIEF
FINANCIAL OFFICER
AS TREASURER

BILL
McCOLLUM
ATTORNEY GENERAL
AS SECRETARY

COLEMAN STIPANOVICH
EXECUTIVE DIRECTOR
	 	1801 Hermitage Boulevard-Suite 100
Tallahassee, Florida 32308
(850) 488-4406	 
	 	Post Office Box 13300
32317-3300	 






			
		 	






			
	ATTENTION:	 	THIS ADDENDUM MUST BE COMPLETED, SIGNED, AND RETURNED BY ALL COMPANIES EXECUTING A
REIMBURSEMENT CONTRACT REGARDLESS OF CHOICE TO ACCEPT OR REJECT THIS OPTIONAL COVERAGE





ADDENDUM NO. 2

to

REIMBURSEMENT CONTRACT

Effective: June 1, 2007

(Contract)




between




LIBERTY AMERICAN INSURANCE COMPANY

Pinellas Park, FL

(Company)




NAIC # 10955




and



THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA) WHICH ADMINISTERS THE FLORIDA
HURRICANE CATASTROPHE FUND (FHCF)



It is Hereby Agreed, effective at 12:01 a.m., Eastern Time, June 1, 2007, that this Contract shall
be amended as follows:



TEMPORARY EMERGENCY OPTIONS FOR ADDITIONAL COVERAGE PURSUANT TO SECTION 215.555(16), FLORIDA
STATUTES.



Pursuant to Section 215.555(16), Florida Statutes, the Temporary Emergency Options for Additional
Coverage (TEACO) provision allows the Company to select additional FHCF reimbursement coverage
below its mandatory FHCF coverage layer under the Reimbursement Contract. The optional coverage
provided in this Addendum No. 2 expires on May 31, 2008. Coverage associated with TEACO shall
otherwise be consistent with terms and conditions as relates to the Reimbursement Contract
including, but not limited to, definitions, coverage for Covered Policies as defined, exclusions,
loss reporting, and examination procedures.




			
	 	 	 






			
	1
	 	FHCF-2007K

Rule 19-8.010 F.A.C















 








I. TEACO Coverage





The Company may purchase its mandatory FHCF premium share of coverage underneath its FHCF
retention in excess of one of three industry retention levels, which are specified as $3
billion, $4 billion, or $5 billion. The price for the layer of coverage below its mandatory FHCF
coverage is 75 cents for each dollar of coverage for the Company’s share of the layer associated
with a $5 billion industry retention, 80 cents for each dollar of coverage for the Company’s
share of the layer associated with the $4 billion industry retention, or 85 cents for each
dollar of coverage for the Company’s share of the layer of coverage associated with the $3
billion industry retention. The Company’s TEACO coverage shall be on an occurrence basis, and
the premium for coverage will include one reinstatement. The Company’s TEACO retention shall
replace the Company’s mandatory FHCF retention when it selects a TEACO option.




The SBA shall reimburse the Company for 45 percent, 75 percent, or 90 percent of its losses from
each Covered Event in excess of the Company’s TEACO retention, plus 5 percent of the reimbursed
losses to cover loss adjustment expense, limited in total to the amount of TEACO coverage
purchased by the Company. The reimbursement percentage shall be the same as the coverage level
selected by the Company under its Reimbursement Contract. The Company’s maximum reimbursement
under its TEACO option shall be its mandatory FHCF premium share of two times the difference
between the industry retention calculated under Section 215.555(2)(e), Florida Statutes, and the
$3 billion, $4 billion, or $5 billion industry TEACO retention based on the Company’s selection
of the TEACO option.




The full limit of the TEACO coverage purchased shall apply only to each of the Company’s two
largest Covered Events. The TEACO coverage does not apply to other Covered Events resulting in
losses.



II. TEACO Premium





The Company’s TEACO premium shall be calculated based on its share of the mandatory FHCF
reimbursement premium. Total TEACO premium shall be calculated based on the assumption that all
insurers entering into Reimbursement Contracts also accepted the TEACO option:




	 	A.	 	The industry TEACO premium associated with the $3 billion retention option
would be equal to 85% of the difference for the coverage between the industry retention
level calculated under Section 215.555(2)(e), Florida Statutes, and the $3 billion
industry TEACO retention level.
	 
	 	B.	 	The industry TEACO premium associated with the $4 billion retention option
would be equal to 80% of the difference for the coverage between the industry retention
level calculated under Section 215.555(2)(e), Florida Statutes, and the $4 billion
industry TEACO retention level.
	 
	 	C.	 	The industry TEACO premium associated with the $5 billion retention option
would be equal to 75% of the difference for the coverage between the industry retention
level calculated under Section 215.555(2)(e), Florida Statutes, and the $5 billion
industry TEACO retention level.






The TEACO premium shall be due and payable in three installments on August 1, 2007, on October
1, 2007, and on December 1, 2007.



			
	 	 	 






			
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III. TEACO Retention





The TEACO retention is the amount of losses below which a TEACO Company is not entitled to
reimbursement from the FHCF under the TEACO coverage option.




The TEACO retention multiple for each TEACO coverage option shall be calculated by dividing $3
billion, $4 billion, or $5 billion by the total estimated mandatory FHCF reimbursement premium
assuming all insurers selected the 90% coverage option. The TEACO retention multiple shall be
used for determining an insurer’s retention if the insurer has selected a TEACO option. The
TEACO retention multiples outlined above shall be adjusted to reflect the coverage level
selected by the Company under its Reimbursement Contract. For insurers electing the 90 percent
coverage level, the adjusted retention multiple is 100 percent of the amount determined under
the preceding paragraph. For insurers electing the 75 percent coverage level, the adjusted
retention multiple is 120 percent of the amount determined under the preceding paragraph. For
insurers electing the 45 percent coverage level, the adjusted retention multiple is 200 percent
of the amount determined under the preceding paragraph.



IV. Liability of the FHCF





The liability of the FHCF with respect to all TEACO addenda shall not exceed an amount equal to
two times the difference between the industry retention level calculated under Section
215.555(2)(e), Florida Statutes, and the $3 billion, $4 billion, or $5 billion industry TEACO
retention level options actually selected, but in no event may the FHCF’s obligation exceed the
actual claims-paying capacity of the FHCF plus the additional TEACO capacity provided for under
Section 215.555(16)(g), Florida Statutes.




The additional capacity shall apply only to the additional coverage provided by the TEACO option
and shall not otherwise affect any insurer’s reimbursement from the FHCF.



V. Coordination of Coverage





Reimbursement amounts under TEACO shall not be reduced by reinsurance paid or payable to the
Company from sources other than the FHCF.




The TEACO coverage shall be in addition to all other coverage provided by the SBA under the
Company’s Reimbursement Contract and shall be in addition to the claims-paying capacity of the
FHCF as defined in Section 215.555(4)(c)1., Florida Statutes.




The TEACO coverage selected is irrevocable and shall not reduce, overlap, or duplicate coverage
otherwise provided for in the Reimbursement Contract or offset any co-payments.



VI. Addendum No. 2 TEACO Coverage Election





ALL COMPANIES EXECUTING A REIMBURSEMENT CONTRACT MUST INDICATE ITS TEACO COVERAGE PROVIDED BELOW
THE FHCF RETENTION BY SELECTING ONE OF THREE TEACO RETENTION LEVELS OR REJECT ALL SUCH COVERAGE.
IF ADDENDUM NO. 2 IS RETURNED WITHOUT A TEACO



			
	 	 	 






			
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RETENTION SELECTED, IT SHALL BE DEEMED BY THE STATE BOARD OF ADMINISTRATION TO BE A CHOICE TO
REJECT TEACO COVERAGE.




If your Company does not want to purchase any TEACO coverage, print “No Coverage” on the line
below and initial the box.



	 	 	 	 	 
	 	 	 
	 	No Coverage
 	 	              /s/ TBM
 	 
	 	 	 
	 	 	 
	 





If your company elects to purchase TEACO coverage, select a TEACO retention level option by
initialing the applicable box below.



	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 
	Company selects $3

billion TEACO 

Retention Option

	 	OR
	 	Company selects $4

billion TEACO

Retention Option
	 	OR
	 	Company selects $5

billion TEACO

Retention Option






	 	 	 	 	 
	VII. Signatures

 	 	 
	/s/ T. Bruce Meyer
 	 	 
	Liberty American Insurance Company 	 	 
	 	 	 
	 



	 	 	 	 	 	 	 	 	 
	By:

	 	T. Bruce Meyer, Pres & CEO
 

	 	 	 	5-23-07
 

	 	 
	 

	 	Name/Title
	 	 	 	Date	 	 






Approved by:




Florida Hurricane Catastrophe Fund


By: State Board of Administration of the State of Florida




	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Linda Lettera / for
 

Coleman Stipanovich

Executive Director
	 	 	 	7/9/07
 

Date
	 	 






Approved as to legality:




	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Thomas A. Burke / for
 

Linda Lettera

General Counsel

FL Bar ID#311911
	 	 	 	7/9/07
 

Date
	 	 






			
	 	 	 






			
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		 	State Board of Administration
of Florida	 	CHARLIE
CRIST
GOVERNOR
AS CHAIRMAN

ALEX SINK 
CHIEF
FINANCIAL OFFICER
AS TREASURER

BILL
McCOLLUM
ATTORNEY GENERAL
AS SECRETARY

COLEMAN STIPANOVICH
EXECUTIVE DIRECTOR
	 	1801 Hermitage Boulevard-Suite 100
Tallahassee, Florida 32308
(850) 488-4406	 
	 	Post Office Box 13300
32317-3300	 







			
	ATTENTION:	 	THIS ADDENDUM MUST BE COMPLETED, SIGNED, AND RETURNED BY ALL COMPANIES EXECUTING A
REIMBURSEMENT CONTRACT REGARDLESS OF CHOICE TO ACCEPT OR REJECT THIS OPTIONAL COVERAGE





ADDENDUM NO. 3

to

REIMBURSEMENT CONTRACT

Effective: June 1, 2007

(Contract)




between




LIBERTY AMERICAN INSURANCE COMPANY

Pinellas Park, FL

(Company)




NAIC # 10955




and



THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA) WHICH ADMINISTERS THE FLORIDA
HURRICANE CATASTROPHE FUND (FHCF)



It is Hereby Agreed, effective at 12:01 a.m., Eastern Time, June 1, 2007, that this Contract shall
be amended as follows:



TEMPORARY INCREASE IN COVERAGE LIMIT OPTIONS FOR ADDITIONAL COVERAGE PURSUANT TO SECTION
215.555(17), FLORIDA STATUTES.



Pursuant to Section 215.555(17), Florida Statutes, the Temporary Increase in Coverage Limit (TICL)
Options provision allows the Company to select additional FHCF reimbursement coverage above its
mandatory FHCF coverage layer under the Reimbursement Contract. The optional coverage selections
provided in this Addendum No. 3 expires on May 31, 2008. Coverage provided under TICL shall
otherwise be consistent with terms and conditions as relates to the Reimbursement Contract
including, but not limited to, definitions, coverage for Covered Policies as defined, exclusions,
loss reporting, and examination procedures.




			
	 	 	 






			
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I. TICL Coverage





The Company may purchase one of twelve optional coverages above its mandatory FHCF coverage
provided for in the FHCF Reimbursement Contract. The TICL options allow the Company to purchase
its mandatory FHCF premium share of one of the twelve optional layers of coverage. The optional
layers of coverage above the mandatory FHCF coverage are $12 billion, $11 billion, $10 billion,
$9 billion, $8 billion, $7 billion, $6 billion, $5 billion, $4 billion, $3 billion, $2 billion,
or $1 billion.




The purchase of a TICL option increases the Company’s coverage under the Reimbursement Contract
as calculated pursuant to Section 215.555(4)(d)2., Florida Statutes. The Company’s increased
coverage shall be the FHCF reimbursement premium multiplied by the TICL multiple. Each TICL
coverage multiple shall be calculated by dividing $12 billion, $11 billion, $10 billion, $9
billion, $8 billion, $7 billion, $6 billion, $5 billion, $4 billion, $3 billion, $2 billion, or
$1 billion by the aggregate mandatory FHCF premium under the Reimbursement Contract paid by all
companies.




In order to determine the Company’s total limit of coverage, the Company’s TICL coverage
multiple is added to its regular Payout Multiple under the Reimbursement Contract. The total of
these two multiples shall represent a number that, when multiplied by an insurer’s mandatory
FHCF reimbursement premium under the Reimbursement Contract, defines the Company’s total limit
of FHCF reimbursement coverage for the Contract Year under the Reimbursement Contract and
Addendum No. 3. The SBA shall reimburse the Company for 45 percent, 75 percent, or 90 percent
of its losses from each Covered Event in excess of the Company’s FHCF Retention under the
Reimbursement Contract, plus 5 percent of the reimbursed losses to cover loss adjustment
expense, not to exceed the Company’s total limit of coverage as defined above. The percentage
shall be the same as the coverage level selected by the Company under its Reimbursement
Contract.



II. TICL Premium





The Company’s TICL premium shall be determined as specified in Section 215.555(5), Florida
Statutes, and shall be due and payable in three installments on August 1, 2007, October 1, 2007,
and December 1, 2007.



III. Liability of the FHCF





Pursuant to Section 215.555(17)(g), Florida Statutes, the liability of the FHCF with respect to
all TICL addenda shall not exceed $12 billion and shall depend on the number of insurers that
select the TICL optional coverage and the TICL coverage options selected. In no circumstance
shall the liability of the FHCF exceed its actual claims-paying capacity as defined in Section
215.555(2)(m), Florida Statutes.




The additional TICL capacity shall apply only to the additional coverage provided under the TICL
options and shall not otherwise affect any insurer’s reimbursement from the FHCF if the insurer
chooses not to select a TICL option to increase its limit of FHCF coverage.



IV. Coordination of Coverage





Reimbursement amounts under TICL shall not be reduced by reinsurance paid or payable to the
Company from sources other than the FHCF.



			
	 	 	 






			
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The TICL coverage shall be in addition to all other coverage provided by the FHCF under the
Company’s Reimbursement Contract or other Addenda to the Reimbursement Contract, and shall be in
addition to the claims-paying capacity of the FHCF as defined in Section 215.555(4)(c)1.,
Florida Statutes, but only with respect to those insurers that select the TICL coverage.




The TICL coverage selected is irrevocable and shall not overlap or duplicate coverage otherwise
provided for in the Reimbursement Contract, or any Addenda to the Reimbursement Contract, or
offset any co-payments or retention amounts.



V. Addendum No. 3 TICL Coverage Election





ALL COMPANIES EXECUTING A REIMBURSEMENT CONTRACT MUST INDICATE BELOW THE LEVEL OF OPTIONAL TICL
COVERAGE SELECTED, IF ANY. IF ADDENDUM NO. 3 IS RETURNED WITHOUT A TICL COVERAGE OPTION
SELECTED, IT SHALL BE DEEMED BY THE STATE BOARD OF ADMINISTRATION TO BE A CHOICE TO REJECT TICL
COVERAGE.




If your Company does not want to purchase any TICL coverage, print “No Coverage” on the line
below and initial the box.



	 	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	 
	 	 	 
	 





By selecting an option below (initial the applicable box), the Company is selecting its
proportionate share based on its mandatory FHCF reimbursement premium to the total mandatory
FHCF reimbursement premiums paid by all companies of the layer of optional coverage.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 
	 	 	 	 
	Company selects $1

billion TICL 

Coverage Option

	 	OR
	 	Company selects $2

billion TICL

Coverage Option
	 	OR
	 	Company selects $3

billion TICL

Coverage Option
	 	OR
	 	Company selects $4

billion TICL

Coverage Option






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 
	 	 	 	 
	Company selects $5

billion TICL 

Coverage Option

	 	OR
	 	Company selects $6

billion TICL

Coverage Option
	 	OR
	 	Company selects $7

billion TICL

Coverage Option
	 	OR
	 	Company selects $8

billion TICL

Coverage Option






			
	 	 	 






			
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	 	 	 	/s/ JBM
	 

	 	 	 	 	 	 	 	 
	 	 	 	 
	Company selects $9

billion TICL 

Coverage Option

	 	OR
	 	Company selects $10

billion TICL

Coverage Option
	 	OR
	 	Company selects $11

billion TICL

Coverage Option
	 	OR
	 	Company selects $12

billion TICL

Coverage Option






	 	 	 	 	 
	VI. Signatures

 	 	 
	/s/ T. Bruce Meyer
 	 	 
	Liberty American Insurance Company 	 	 
	 	 	 
	 



	 	 	 	 	 	 	 	 	 
	By:

	 	T. Bruce Meyer, Pres & CEO
 

Name/Title
	 	 	 	5-23-07
 

Date
	 	 






Approved by:




Florida Hurricane Catastrophe Fund


By: State Board of Administration of the State of Florida




	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Linda Lettera / for
 

Coleman Stipanovich

Executive Director
	 	 	 	7/9/07
 

Date
	 	 






Approved as to legality:




	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Thomas A. Burke / for
 

Linda Lettera

General Counsel

FL Bar ID#311911
	 	 	 	7/9/07
 

Date
	 	 






			
	 	 	 






			
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		 	State Board of Administration
of Florida	 	CHARLIE
CRIST
GOVERNOR
AS CHAIRMAN

ALEX SINK 
CHIEF
FINANCIAL OFFICER
AS TREASURER

BILL
McCOLLUM
ATTORNEY GENERAL
AS SECRETARY

COLEMAN STIPANOVICH
EXECUTIVE DIRECTOR
	 	1801 Hermitage Boulevard-Suite 100
Tallahassee, Florida 32308
(850) 488-4406	 
	 	Post Office Box 13300
32317-3300	 






ADDENDUM NO. 4

to

REIMBURSEMENT CONTRACT

Effective: June 1, 2007

(Contract)




between




LIBERTY AMERICAN INSURANCE COMPANY

Pinellas Park, FL

(Company)




NAIC # 10955




and



THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA) WHICH ADMINISTERS THE FLORIDA
HURRICANE CATASTROPHE FUND (FHCF)



It is Hereby Agreed, effective at 12:01 a.m., Eastern Time, June 1, 2007, that this Contract shall
be amended as follows:



PREAMBLE



The Legislature of the State of Florida has enacted Section 215.555, Florida Statutes “Statute”,
which directs the SBA to administer the FHCF. This Contract, consisting of the principal document
entitled Reimbursement Contract, addressing the mandatory FHCF coverage, and Addenda, is subject to
the Statute and to any administrative rule adopted pursuant thereto, and is not intended to be in
conflict therewith. All provisions in the principle document are equally applicable to each of the
Addenda unless specifically superseded by one of the Addenda.



ARTICLE II — PARTIES TO THE CONTRACT



This Contract is solely between the Company and the SBA which administers the FHCF. In no instance
shall any insured of the Company or any claimant against an insured of the Company, or any other
third party, have any rights under this Contract, except as provided in Article XIV. The SBA will
only disburse funds to the Company, except as provided for in Article XIV of this Contract. The
Company shall not, without the prior approval of the Office of Insurance Regulation, sell, assign,
or transfer to any third party, in return for a fee or other consideration, any sums the FHCF pays
under this Contract or the right to receive such sums.




			
	 	 	 






 




			
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Approved by:




Florida Hurricane Catastrophe Fund


By: State Board of Administration




	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Linda Lettera / for
 

Coleman Stipanovich

Executive Director
	 	 	 	7/9/07
 

Date
	 	 






Approved as to legality:




	 	 	 	 	 	 	 	 	 
	/s/ Thomas A. Burke / for
 

Linda Lettera

General Counsel

FL Bar ID#311911
	 	 	 	7/9/07
 

Date
	 	 






	 	 	 	 	 
	 	 	 
	     /s/ T. Bruce Meyer 	 	 
	Liberty American Insurance Company 	 
	 	 	 
	 



	 	 	 	 	 	 	 	 	 
	By:

	 	T. Bruce Meyer, Pres. & CEO
 

Name/Title
	 	 	 	5/23/07
 

Date
	 	 






 




			
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