Invitation to Negotiate (ITN) - Florida State Board of Administration

SECTION I – INTRODUCTION AND PURPOSEA. BackgroundThe Florida Hurricane Catastrophe Fund (FHCF) was created in November 1993 during a speciallegislative session in response to the State’s property insurance crisis resulting as a consequenceof Hurricane Andrew. The FHCF is structured as a tax-exempt state trust fund under thedirection and control of the State Board of Administration of Florida (SBA). The SBA is aconstitutional entity of Florida state government that provides a variety of investment services tovarious governmental entities, and administers the FHCF as directed by Section 215.555, FloridaStatutes.The Board of Trustees (Board) governs the SBA. The Board is comprised of the Governor, RickScott, as Chairman; the Chief Financial Officer, Jeff Atwater, as Treasurer; and the AttorneyGeneral, Pam Bondi, as Secretary. The Board has ultimate authority and oversight for theFHCF. All three of the Trustees of the Board are elected statewide to their respective positionsas Governor, Chief Financial Officer, and Attorney General.The Board delegates authority to the Executive Director of the SBA, who serves at the discretionof the Board, and is responsible for managing and directing all administrative, personnel,budgeting, investment policy, and investment functions. The management and day-to-dayoperations of the FHCF is the responsibility of the Chief Operating Officer of the FHCF (ChiefOperating Officer), who reports directly to the Executive Director. The Chief Operating Officercurrently manages thirteen professional and administrative support staff. A copy of theorganizational chart for the FHCF is attached as Exhibit I. Paragon Strategic Solutions Inc.currently provides administrative and actuarial consulting services.The purpose of the FHCF is to protect and to advance the State’s interest in maintaininginsurance capacity in Florida by providing reimbursements to insurers for a portion of theircatastrophic hurricane losses. All authorized insurers in Florida that write “covered policies,” asdefined in Section 215.555, Florida Statutes, are required annually to enter into a reimbursementcontract with the SBA, to report their exposure, and to pay an actuarially indicated premium.Each year, participating insurers are sent the data call instructions, which outline how theirexposure data is required to be reported. In the event of a hurricane with losses large enough toexceed an insurer’s retention and thus trigger FHCF coverage, insurers are required to reporttheir losses by calendar year-end and quarterly thereafter. In general, the FHCF reimbursesinsurers based on paid losses. The law governing the FHCF also provides for advances to certaininsurers under the limited circumstances outlined therein.Additional information regarding the SBA and the FHCF is available on the FHCF’s websitelocated at www.sbafla.com/fhcf.3

B. PurposeThe purpose of this Invitation to Negotiate (ITN) is to solicit competitive responses fromqualified organizations (hereinafter referred to as Respondents) offering an array ofadministrative services to support the legal obligations of the SBA in regard to administering theFHCF and to solicit competitive responses for actuarial consulting services related todevelopment of the formula for determining the actuarially indicated premium to be paid to theFHCF. Respondents may respond to one or both of these services in a single proposal.The successful Respondent will need to demonstrate exceptional credentials and expertisenecessary to provide actuarial consulting services and/or to administer the complexities of theFHCF. The SBA intends to continue to outsource these services. The FHCF will oversee thesevendors and serve in a program monitoring and policy making role. To be considered, eachRespondent’s proposal must meet the standards and requirements set forth in Section IV,Response Requirements.The SBA intends to enter into a contract with the Respondent or Respondents selected. TheSBA may choose to enter into separate contracts for administrative services and actuarialconsulting services or to enter into a contract for both of these services combined. The final feeand the basis thereof will be determined during contract review and negotiation.The issuance of this ITN is merely the beginning of the negotiation process. Alternate means ofaccomplishing the requirements specified herein, with reasonable assurance of satisfactoryresults, will be considered and may be accepted, at the SBA’s sole discretion, without furtheraddendum to this ITN. The SBA may, in its sole discretion, enter into one or more contracts thatinclude terms (including terms relating to pricing and services) that are materially different fromthe requirements of this ITN or the terms of any response submitted under this ITN. As a result,the SBA may consider any and all responses (including modifications to any response), anyinformation obtained from oral interviews or on-site reviews (if any), the negotiation processbetween the SBA and one or more of the Respondents, or information from any other source oralternative in determining whether to enter into one or more contracts and the terms andprovisions of such contract. Any contract that shall serve as the agreement between the partieswill be developed through the negotiation process. The SBA may enter into negotiations withthe Respondent(s) in order to achieve the most effective plan. The SBA reserves the right tonegotiate concurrently or separately with competing Respondents any time after the finalists areselected. The SBA reserves the right to accept portions of a competing Respondent’s responseand use such portions to form an overall program in the best interest of the SBA. Furthermore,the SBA shall have the right to use any or all ideas or adaptations of the ideas presented in anyresponse received pursuant to this ITN. Selection or rejection of a response will not affect thisright. The SBA reserves the right to reject any and all responses or portions thereof. The SBAreserves the right to withdraw this ITN or a portion of this ITN without selecting a vendor. Theright of the SBA to set aside submitted proposals and re-negotiate with its existing vendors isretained without exception. The SBA reserves the right to not utilize the services of any selectedorganization or to terminate the selection without cause or without penalty.4

4. Must have a minimum of five years relevant experience providing reinsurance relatedadministrative services and/or actuarial consulting services. A Respondent may submit aresponse only for those services the Respondent seeks to provide where the minimumexperience requirement has been met.5. If Respondent seeks to provide Administrative Services, the Respondent mustdemonstrate its ability to review and interpret policy coverages on personal residentialpolicies, commercial residential policies, mobile home policies, farmowners policies, andany other covered policies as defined in Section 215.555, Florida Statutes.6. If Respondent seeks to provide Administrative Services, the Respondent mustdemonstrate its capabilities and experience in evaluating property losses in comparison toproperty coverages provided under individual property policies.7. If Respondent seeks to provide Actuarial Consulting Services, the Respondent must havea minimum of five years of relevant experience developing rates and providing valuationof property claims and losses.8. If Respondent seeks to provide Actuarial Consulting Services, the primary individualsdirectly assigned to provide these services to the FHCF must be a member of theCasualty Actuarial Society.6

SECTION II – SCOPE OF SERVICESADMINISTRATIVE SERVICESThe scope of the assignment encompasses the administrative needs associated with the SBA’sduties under the law as well as other management needs as described below. The servicesinclude, but are not limited to, the items listed on the Services Questionnaire, Appendix I. Thisscope does not include actuarial services or hurricane modeling services in conjunction withdetermining the premium formula for the FHCF, performing on-site exposure and claimsexaminations, nor placement of reinsurance coverages on behalf of the FHCF.The FHCF functions similar to a reinsurer for all authorized insurers (and Citizens PropertyInsurance Corporation) writing insurance on residential structures or their contents (includingcommercial residential structures and contents) located in Florida, and the SBA is seeking toacquire services from a qualified, experienced administrative entity which has the capability toperform a wide array of services.A successful Respondent must agree to maintain confidentiality of all data reviewed. The SBAexpects to be assigned a dedicated client servicing team consisting of knowledgeable,experienced, and responsive individuals who are committed to daily communication and arecapable of responding to daily service requests.ACTUARIAL CONSULTING SERVICESThe scope of the assignment encompasses the actuarial services needs associated with the SBA’sduties under the law. Section 215.555(5)(b), Florida Statutes, states, in part, that “[T]he StateBoard of Administration shall select an independent consultant to develop a formula fordetermining the actuarially indicated premium to be paid to the fund.” Thus, the means forensuring the independence of the actuaries to provide the services listed in this ITN must beaddressed in your response. The services required include, but are not limited to, the items listedon the Services Questionnaire, Appendix II. This scope does not include hurricane modelingservices in conjunction with determining the premium formula for the FHCF, nor placement ofreinsurance coverages on behalf of the FHCF. The SBA is seeking to acquire the services from aqualified, experienced entity with the proven capability to perform actuarial consulting services.A successful Respondent must agree to maintain confidentiality of all data reviewed. The SBAexpects to be assigned a dedicated client servicing team consisting of knowledgeable,experienced, and responsive individuals who are committed to frequent communication and arecapable of responding to daily service requests.7

SECTION III – REQUIRED INFORMATIONThe purpose of this section is to identify the information that should be submitted in response tothis ITN, and the order in which it should appear in the proposal response package. Eachproposal response package should include the following, in the order listed below:A. Cover LetterThe response shall contain a cover letter addressed to the designated contact identifying theRespondent’s name and principal address. Provide the name, telephone number, and emailaddress of a person authorized to represent the Respondent regarding all matters related to theproposal. Indicate if the proposal is for administrative services, actuarial consulting services, orboth. The letter shall also explicitly affirm the following:1. The Respondent has the current capability to provide the proposed services.2. The Respondent has reviewed the minimum qualifications and meets the eligibility criteriaset forth in Section I, C of this ITN.3. The Respondent has thoroughly reviewed this ITN.4. The Respondent acknowledges and accepts all terms and conditions included in this ITN.5. A person authorized to bind the Respondent to all commitments made in its proposal is thesignatory of the letter.B. Conflicts of InterestThe Respondent must disclose whether any officer, director, employee, or agent is also a currentor former employee of the SBA or any of the members of the Board. All Respondents mustfurther disclose any factors, financial or otherwise, known to them which may give rise to aconflict of interest between the Respondent and the SBA and its employees, or have the effect ofimpacting the ability of the Respondent to meet its responsibilities, duties, and obligations to theSBA, as set forth in this ITN.C. Notice of Legal Proceedings1. Each Respondent shall disclose any and all known or threatened material lawsuits, legalor administrative proceedings or governmental investigations, criminal actions or lawenforcement activities (including those by federal, state or local authorities, or selfregulatoryorganizations) or non-routine Federal Reserve, Comptroller of the Currency,Securities and Exchange Commission or Commodities Futures Trading Commissioninquiries or investigations relating to Respondent or any of Respondent’s affiliates,including any proceedings to which Respondent, its affiliates, or any of their respectiveofficers, directors or employees, is a named party or of which any of such has been thefocus. Is Respondent aware of any activities of its organization, its affiliates, or theirrespective officers, directors or employees that are likely to result in any of the aboveinvestigations or proceedings?8

2. List and describe any such proceedings or actions that have occurred in the last two years,including whether Respondent or any of its affiliates, or their respective officers,directors, or employees have been censured by any regulatory body. In the last twoyears, has Respondent, its principals or any of Respondent’s affiliates submitted a claimfor errors and omissions, fiduciary liability and/or fidelity bond insurance coverage? Ifyes, please explain and provide details.3. Does the Respondent have a procedure by which it may undertake internal investigationsof its employees, officers, or directors? Briefly describe. Disclose any and all ongoinginternal investigations of any of Respondent’s officers, directors, or employees. Givespecific attention to those persons who would be closely responsible for the servicessought by the SBA.D. Services QuestionnaireThe Respondent shall complete and submit the Services Questionnaire attached hereto asAppendix I and/or Appendix II, which is relevant to the services Respondent seeks to provide.When completing the questionnaire, the Respondent must give clear, concise, quantifiable repliesto all questions, restating each question in bold face type and using no smaller than 10 point font,with its response directly below. Tables and graphs are exempt from this font requirement, butmust be readable. The length of the response is at the discretion of the Respondent. However,responses are expected to be brief and to contain full and fair disclosure of essential elements.Any omitted or incomplete responses may eliminate a Respondent from evaluation.E. Service Requirements Affirmation StatementThe proposal shall include a signed copy of the Service Requirements Affirmation Statementattached as Appendix III.F. Financial InformationProvide the SBA your organization’s audited financial statements for the last three years. Thefinancial statements must include the auditor’s report and any management letters which havebeen issued.G. Fee Proposal (Separate Document)Provide the SBA with a fee proposal for the types of services the Respondent seeks to provide(i.e., provide a separate fee for administrative services and/or actuarial consulting services and afee for the combined services). Under the fee proposal for administrative services, the servicesprovided for the Insurance Capital Build-up Incentive Program must be shown as a separate fee.For the anticipated term of the contract, see Section IV, N. Respondents are encouraged toprovide the SBA with the most competitive price offered to large public institutions. Althoughthe fee for services will be a consideration in the negotiation of the final contract, the fee will notbe a factor in the evaluation process. The Respondent should indicate if the fee is negotiable ornon-negotiable. Indicate whether the fee is a fixed or variable fee (hourly basis) and the period9

of time (e.g., one year, two years, five years) of any fee guarantees or commitments. Providerecent examples (during the last three years) of fees you have charged for comparable projects, ifany. Fees will be considered in conjunction with the proposed scope of services and negotiatedprior to awarding the contract. Please note, the Fee Proposal(s) must be submitted separatelyin a sealed envelope or box and must be marked “ITN for Administrative Services and/orActuarial Consulting Services – Fee Proposal – FHCF.”10

SECTION IV – RESPONSE REQUIREMENTSThe purpose of this section is to indicate the terms and conditions that will govern thesubmission and review of proposals made in response to this ITN. The organization(s) selectedto provide services, as part of the ITN process, will be required to enter into a contract with theSBA.A. CompletenessA response must be complete as to all terms and conditions, including the appendices, on thedate submitted. Additional information submitted after the response documents or separate fromthe response documents will not be considered unless specifically requested by the SBA and thenonly to the extent requested. Incomplete responses may be eliminated from furtherconsideration.B. Requests for Modification of a ResponseA Respondent to this ITN may withdraw and modify its response prior to the response deadlineonly upon prior approval by the SBA. A request for modification must be in writing andaddressed to the designated contact at the delivery address set forth in G. below, and mustadequately explain the reasons for the request to modify the response. If the SBA approves therequest, a modified response may then be submitted. The SBA will not consider modificationsoffered in any other manner, whether oral or written. Under no circumstances may theRespondent modify a response unilaterally at a date or time subsequent to the response deadlinespecified in E. below. The SBA may, however, permit any Respondent to modify its responseafter the deadline specified in E. below, if the SBA determines that such modification is in thebest interest of the SBA or the FHCF.C. Respondent GuaranteesAll terms and conditions submitted in response to this ITN (all parts) must be guaranteed toremain effective and may not be changed, amended, modified, qualified, or otherwise altered bythe selected Respondent(s) for a period beginning on the date of the response filing deadline forthis ITN, and ending at the conclusion of the contract. All fees and charges as proffered inresponse to this ITN must be guaranteed for the term of the contract.D. Requests for Clarification of the ITNAll questions regarding the clarification of any requirement, standard, or question in this ITNbecause of any ambiguity, conflict, discrepancy, omission or other error, must be received by theSBA no later than 1:00 p.m. ET on October 29, 2012.Written requests for clarification should be sent via e-mail to donna.sirmons@sbafla.com, to thedelivery address provided in G. below, or to the following fax number: (850) 413-1344,Attention: Donna Sirmons.11

The SBA reserves the right to accept or reject any or all requests for clarification, either in wholeor in part, and may require requests to be clarified or supplemented through additional writtensubmissions. Respondents will be notified of the rejection of their request for clarification. Oralrequests for clarification will not be accepted.The SBA’s responses to clarification requests will be posted on the FHCF website atwww.sbafla.com/fhcf under “Announcements.” Respondents unable to download responsesshould direct their requests for hard copies via e-mail to donna.sirmons@sbafla.com, to thedelivery address provided in G. below, or to the following fax number: (850) 413-1344,Attention: Donna Sirmons. Such responses shall be considered an addendum to and, as such, anintegral part of this ITN.The SBA does not guarantee the validity or reliability of information obtained from othersources. If it becomes necessary to revise any part of this ITN, an addendum will be posted onthe FHCF website at www.sbafla.com/fhcf. The Respondent is responsible for checking theFHCF website for any addendums or updates.E. Response DeadlineAll responses must include the completed items listed in Section III of this ITN. The responsedeadline for this ITN is 3:00 p.m. ET, November 20, 2012. For the items listed in Section III, AB, C, D, and E, submit eight bound copies of your response, an unbound original document, andan electronic copy of your response on a CD-ROM in a PDF format. For the items listed inSection III, F and G, only three copies, plus an electronic copy on a CD-ROM in a PDF format,are required. Submit these responses to the premises of the SBA at the delivery address asprovided in G. below. Facsimile and electronic transmissions are not acceptable. All responses(excluding the Fee Proposal) must be submitted in a sealed envelope or box and must be marked“ITN for Administrative Services and/or Actuarial Consulting Services – FHCF.” The FeeProposal must be submitted in a separate sealed envelope or box and must be marked “ITN forAdministrative Services and/or Actuarial Consulting Services – Fee Proposal – FHCF.” TheSBA accepts no responsibility whatsoever for failure to deliver or late delivery by postal orcommercial courier services. Failure by the postal or commercial courier services to meet theresponse deadline may result in disqualification.F. SBA Not Liable for Respondent’s CostThe SBA shall not be liable or responsible for any costs incurred by any Respondent forpreparing and submitting any response to this ITN, attending any oral interview or hosting anyon-site visit, if necessary, or for any other activities or occurrences related in any way to this ITNor prior to the issuance of a contract. The SBA shall pay all costs incurred by the selectedRespondent(s) after the issuance of the contract in accordance with the applicable compensationschedule as agreed upon by the SBA and the successful Respondent(s). The SBA will not payexpenses and costs incurred outside the scope of the applicable compensation schedule.12

G. Delivery AddressDonna Sirmons, Management Review AnalystState Board of Administration of FloridaFlorida Hurricane Catastrophe Fund1801 Hermitage Boulevard, Suite 100Tallahassee, Florida 32308Email: donna.sirmons@sbafla.com(850) 413-1349H. Respondent’s ResponsibilityEach Respondent should familiarize itself with the service requirements and the work to beperformed before submitting a response. All proposals shall remain valid for at least 180 daysfrom the date of submission.I. Interviews at the SBARespondents that submit a proposal in response to this ITN may be required to give an oralpresentation(s) of their proposals to the SBA. Should oral presentations be entertained, eachselected Respondent will be given an opportunity to clarify or elaborate on its proposal, but thiswill not be intended to change the Respondent’s original written submission. The SBA willdetermine the occurrence, date, time, and location of such presentation(s) if needed.J. Disclosure of Proposal ContentsAll material submitted by Respondents shall become the property of the SBA and will not bereturned. Proposals submitted may be reviewed and evaluated by persons designated by theSBA, in its sole discretion. Each Respondent understands and agrees that all documents andrecords made or received by the SBA in connection with this ITN or any official business of theSBA are public records and must be furnished and disclosed to any person under a request toinspect or copy such documents or records, pursuant to Chapter 119, Florida Statutes. Ifinformation is provided that could reasonably be ruled a “trade secret” as defined in Section812.081, Florida Statutes, please include such information in a separate attachment clearlymarked – “Trade Secret Information – Administrative Services and/or Actuarial ConsultingServices.” Please include a table of contents within this attachment with a detailed listing of andexplanation for EACH item marked as a “trade secret.” Designation of items as “trade secrets”by Respondents is not dispositive and does not guarantee that the items will not ultimately bedisclosed pursuant to Chapter 119, Florida Statutes. The State of Florida places a high priorityon the public’s right of access to governmental meetings and records. By submitting a response,each Respondent further understands and agrees that the SBA shall have the right to use any andall information, records, documentation, or items, including any derivation or adaptation thereofor knowledge gained thereby, presented by any Respondent in any response, during anyinterview, or otherwise in connection with this ITN in negotiating and entering into any contractor for any purpose. The SBA shall have such rights regardless of whether the SBA enters intoany contract with such Respondent or any Respondent under this ITN, successfully negotiates13

any contract with any Respondent, rejects any or all responses to this ITN, amends or withdrawsthis ITN at any time, or otherwise satisfies its needs through alternative means.K. Right to Amend and/or WithdrawThe SBA, in its sole discretion, reserves the right to amend or withdraw this ITN at any time andfor any reason. Issuance of this ITN in no way constitutes a commitment by or obligation of theSBA to enter into any contract, and the SBA may, in its sole discretion, reject all responses tothis ITN for any reason whatsoever.L. Rejection of ProposalsThe SBA will be the sole judge of the Respondent’s responsiveness to this ITN and reserves theright to reject, in whole or in part, any or all responses, with or without cause, without incurringany liability whatsoever. The SBA may also waive any material or immaterial defect in aresponse or deviation from the requirements of this ITN. Any waiver exercised under thissection will not modify any provision of this ITN.M. Contract ExecutionAfter selection of the finalists, the SBA will enter into contract negotiations with the selectedRespondent(s) to finalize terms, fees, and conditions. This ITN and the selected Respondent(s)proposal(s), or any part thereof, may be included in and made a part of the final contract. Theresulting contract and all attachments shall be considered a public document.If, in the sole opinion of the SBA, an acceptable contract with the selected Respondent orRespondents cannot be reached, the SBA reserves the right to negotiate with the next preferredRespondent or to take any other actions in its sole discretion as contemplated by this ITN.N. Contract TermThe SBA intends to enter into a five year contract with the selected Respondent(s).O. False or Misleading StatementsAny response which contains false or misleading statements, or which provides references whichdo not support an attribute, condition, or capability claimed in the response document, will not beconsidered by the SBA if, in the opinion of the SBA, such false or misleading statement wasintended to mislead the SBA in its evaluation of the response.P. CollusionBy responding, the Respondent represents that its proposal is not made in connection with anycompeting Respondent submitting a separate response to this ITN and is in all respects fair andwithout collusion or fraud. It is further represented that the Respondent did not directly orindirectly induce any party to submit a false or sham proposal or to refrain from proposing. In14

addition, the Respondent represents that it did not participate in the ITN development process,had no knowledge of the specific contents of the ITN prior to its issuance, and that no employeeof the SBA participated directly or indirectly in the Respondent’s proposal preparation.Q. Quiet PeriodThe Respondent (its agents, officers, principals, and employees, including any individualassisting the Respondent in this process) will not engage in any written or verbal communicationduring the “selection period” (defined below) between the Respondent or any individual assistingthe Respondent to be selected and the Executive Director of the SBA, the Evaluation Team, orany SBA employee, whether or not such individual or employee is assisting in the selection ofthe Respondent, regarding the merits of the Respondent or regarding whether the SBA shouldretain or select the Respondent. An exception is given for the Procurement Manager anddesignated members of the Evaluation Team and Negotiation Team. Any unauthorized contactmay disqualify the Respondent from further consideration. Normal business communications areallowed, however, for current SBA service providers who are also ITN respondents.The Respondent will not engage in any lobbying efforts or other attempts to influence the SBA,the Executive Director of the SBA, the Evaluation Team, or SBA employees, or any member ofthe Board or their respective staffs, consultants or managers, in an effort to be selected. Any andall such efforts made by the Respondent or its agents, officers, principals, employees, orlobbyists will be disclosed to the Executive Director of the SBA within five calendar days of itsbecoming known.The "selection period" for this ITN begins on November 20, 2012, and will continue until thefinal selection has been announced or the selection process is otherwise concluded.Nothing herein shall preclude the SBA from seeking clarification about the substance of theresponse to this ITN within the Quiet Period time frame as provided herein. Nothing herein shallpreclude a Respondent from seeking a request for clarification as provided herein.R. Further Instructions and Conditions1. All responses to this ITN must conform to these instructions. Failure to conform may beconsidered appropriate cause for rejection of the response.2. Terms and conditions of the ITN – Submission of a proposal indicates the Respondent’sacceptance of the conditions contained in this ITN, unless clearly and specifically notedin the proposal submitted and confirmed in the contract between the SBA and theRespondent selected.3. Conformance with statutes – Any contract awarded as a result of this ITN must be in fullconformance with statutory and other legal requirements of the State of Florida and theU.S. government.15

4. Joint proposals are not permitted.5. Timing and sequence – The timing and sequence of events resulting from this ITN willbe determined solely by the SBA and may be modified by the SBA in its sole discretion.6. Oral agreements – Any alleged oral agreement or arrangement made by a Respondentwith the SBA or any employee of the SBA shall be superseded by the written contractbetween the SBA and such Respondent.7. Amending or canceling requests – The SBA reserves the right to amend or cancel thisITN, prior to the due date and time, at its sole discretion.8. Rejection for default or misrepresentation – The SBA reserves the right to reject theproposal of any Respondent that is in default of any prior contract, for misrepresentationor otherwise, as may be determined by the SBA (or its designate) in its sole discretion.9. Clerical errors in awards – The SBA reserves the right to correct inaccurate awardsresulting from its clerical errors.10. Respondent’s presentation of supporting evidence – A Respondent, if requested, must beprepared to present evidence of experience, ability, service facilities, and financialstanding necessary to satisfactorily meet the requirements set forth or implied in itsproposal.11. Right to reject previous vendors – The SBA reserves the right to reject a proposal by aRespondent that has previously provided work to the FHCF or whose personnel includesindividuals previously rejected by the SBA for services.12. Corrections and changes – Any corrections or changes to this ITN will be issued by theSBA, will be identified as a correction or change, and will be posted on the FHCFwebsite at www.sbafla.com/fhcf. Corrections or changes made in any other manner willnot be binding. It is the responsibility of the Respondent to obtain all corrections andchanges.13. Dispute Resolution – The contract shall not include binding arbitration provisions, suchas those typically found in Alternative Dispute Resolution Procedures.14. Respondent’s Credentials – The SBA may make such investigations, as deemednecessary, to determine the ability of the Respondent to perform the services specified inthis ITN. The SBA reserves the right to reject any response if the evidence submitted by,or investigation of, the Respondent fails to satisfy the SBA that the Respondent isproperly qualified to carry out the obligations of the contract.15. Proposal Content and Format – In determining the capabilities of a Respondent toperform the services specified herein, the information required in this ITN must beprovided by the Respondent and will be weighed by the Evaluation Team as indicated in16

the evaluation process. (Note: Each requirement must be thoroughly addressed.Taking exception to any requirement listed in this ITN may disqualify theRespondent and its response, in the SBA’s sole discretion.)17

SECTION V – EVALUATION CRITERIACriteria:The responses to this ITN that satisfy the minimum qualifications set forth in Section I, C will beindependently evaluated by an Evaluation Team on the basis of the written responses to this ITNand additional written information as requested. Additionally, oral interviews and on-sitereviews will be evaluated by the Evaluation Team if they are determined to be necessary. Theevaluation will utilize the following broad scoring categories:The experience and qualifications of the Respondent’s organization 30%Respondent’s personnel/professional staff experience, qualifications,specialized capabilities, and expertise 30%Respondent’s resources and capability to provide the Scope of Services 30%Quality, clarity, and responsiveness of the proposal 5%Adherence to ITN requirements 5%Total 100%The evaluation framework used to evaluate responses within the broad scoring categories willconsider the following components by category:Respondent’s organization experience and qualificationsResponses will be assessed on a comparative basis reviewing the size and breadth of overalloperations, client experience, and services offered.Respondent’s personnel/professional staff experience, qualifications, specialized capabilities,and expertiseResponses will be assessed on a comparative basis reviewing the quality of the key professionalpersonnel assigned to provide services to the FHCF and considering their experience, theirqualifications, and their specialized expertise as it relates to the Scope of Services.Respondent’s resources and capability to provide the Scope of ServicesResponses will be assessed on a comparative basis reviewing the relative merits (and points ofdifferentiation) on the resources, capability and approach to providing services, and staff to meetthe respective components of the Scope of Services as outlined in this ITN.Quality, clarity, and responsiveness of the proposalResponses will be assessed on a comparative basis related to the overall quality, clarity, andresponsiveness thereof as evidence of the ability of a Respondent to effectively demonstrate ahigh quality, verifiable, responsive ability to meet the Scope of Services required by the SBA.18

Adherence to ITN requirementsResponses will be assessed on a comparative basis reviewing the completeness of aRespondent’s submission relative to the universe of respondents and the ITN’s technicalrequirements.Although the fee for services will be a consideration in the negotiation of the final contract, thefee will not be considered in the evaluation process. The disclosures in Section III, B and C willbe used for informational purposes or as a basis for possible disqualification, but will nototherwise be considered in the evaluation process.The Evaluation Team will review the responses and assign a score in each category for eachRespondent. The scoring by each member of the Evaluation Team will be aggregated toestablish an overall ranking by the team.Using the scoring and evaluation process, organizations may be recommended by the EvaluationTeam for interviews at the SBA and/or on-site reviews (if needed). Commitments made by theRespondents at the interviews and/or on-site reviews will be considered binding. Informationand materials obtained during the interviews and/or on-site reviews will be used by theEvaluation Team to prepare final scores for the Respondents. This final scoring will take intoconsideration the written response to this ITN and any information, evidence or capabilities that,in the judgment of the Evaluation Team, demonstrate a finalist as being best qualified to providethe necessary services to the SBA. The Evaluation Team will present the final scores and/orrankings and a recommendation to the Negotiation Team.The Negotiation Team intends to evaluate service levels, fee proposals, terms of performanceand other contract terms within the context of the Respondent’s complete response (i.e., writtenresponse, additional written information submitted by the Respondent, if any, and presentations),and any other information available to the Negotiation Team from any other source. Subsequentnegotiation is expected to take place upon the selection of the finalist.The Negotiation Team will present the final scores and/or rankings and a recommendation to theExecutive Director. The Executive Director shall have the sole authority, in his discretion, todetermine whether the SBA will enter into any agreement with any Respondent and to make allfinal decisions regarding the matters contemplated by this ITN.The SBA will not be required to select the lowest-cost Respondent.19

SECTION VI – TIMELINEThe timeline of the search and evaluation process as currently planned (subject to change at thesole discretion of the SBA without liability) is as follows:October 22, 2012October 29, 2012 (1:00 pm ET)November 5, 2012November 20, 2012 (3:00 pm ET)December 3, 2012December 12-19, 2012 &January 7-11, 2013January 15, 2013April 1, 2013ITN IssuedRequests for Clarification DueResponses to Requests for Clarification PostedResponses to ITN DeadlineSelection of FinalistsInterviews at SBA & On-Site (if needed)Final Selection and Notification Contingent onSuccessful Contract NegotiationEffective Date of ContractNote: The SBA reserves the right to change the ITN Timeline. Changes will be posted on theFHCF website at www.sbafla.com/fhcf under “Announcements,” and may be provided directly tothe Respondents/Finalists.20

Appendix I: Services Questionnaire -Administrative Services______________________________________________Responses to each item should appear in the same order as listed in this ITN. The Respondentmust give clear, concise, quantifiable replies to all questions, restating each question in bold facetype and using no smaller than 10 point font, with its response directly below. The SBA requiresdirect answers to each item and does not require generalized marketing information. Tables andgraphs are exempt from the font requirement, but must be readable.A. Executive SummaryProvide a brief summary within which you summarize the key value and distinguishing featuresof your organization. Ensure that you identify how the organization, team assigned, and servicesoffered are designed to provide exceptional services to the FHCF.B. Organization’s Experience and Qualifications1. Describe briefly your organization’s background/history, ownership structure, primarylocation(s) and size (number of offices).2. List all insurance coverage your organization has for errors & omissions and anyprofessional liability insurance.3. Has the Respondent or key personnel previously had a contract with the SBA? If so, wasthat contract not renewed? Was the contract terminated?4. Describe any anticipated changes to your organization’s basic ownership structure or anyother significant changes anticipated in your organization, its management or keypersonnel.5. Demonstrate the financial and human resource capabilities available for a task of this sizeand complexity. A proven track record in managing a wide array of administrativeservices is essential.6. Describe the availability of key personnel during the SBA’s operational hours of 8:00AM – 5:00 PM, ET.7. Identify the internal and external entities that audit, regulate, and/or review yourorganization.8. The SBA supports and encourages diversity and participation of small and minoritybusiness enterprises in contracting. In order to identify minority, woman-owned, andAppendix I21

disabled veteran businesses or other organizations which actively pursue providingopportunities to women and minorities, indicate whether your organization is a minorityownedbusiness or a woman-owned business, and identify the principal shareholders whoqualify your organization. Provide a brief description of your organization’s minorityhiring/affirmative action program.C. Experience, Qualifications, Specialized Capability, and Expertise of Respondent’sPersonnel/Professional Staff1. How many personnel, currently employed with your organization, will be directlyassigned to provide services to the FHCF?a. Management/Administrativeb. Technical/Analyticalc. Otherd. Total2. Provide a brief biography for each of the personnel listed above. Describe eachindividual’s current role with the organization, their experience, and the length of timeeach person has been with the organization.3. Provide an organizational chart showing functions, positions, and titles of those identifiedabove.4. Describe any plans to use subcontractors or third parties for any of the services to beprovided to the SBA. Specifically state the percent of services that will be dependentupon the subcontractors. The SBA reserves the right to approve or disapprove anysubcontractors as part of the negotiation process. Also, any subcontractors would berequired to meet requirements for maintaining confidentiality of data.D. Capability/Resources to Provide Required Services1. Describe in general your organization’s qualifications for providing reinsurance orsimilar related administrative services and previous work experience in this area. Providea list of three client references (name, phone number, and mailing address) whom theSBA may contact. Provide a list of three clients (name, phone number and mailingaddress) who have terminated, cancelled or non-renewed your services within the pastthree years. Indicate if none.2. Describe your organization’s experience reviewing and interpreting policy coveragesrelated to personal residential, commercial residential, mobile home, farmowners, andother covered policies identified in Section 215.555, Florida Statutes.3. Describe your organization’s experience reviewing property insurance claims andspecifically list any experience in evaluating property insurance claims in relation toproperty coverages.22

E. Services Required1. Describe your organization’s capability to provide each of the following types ofservices:a. Database Management – A database must be maintained for purposes of collecting,storing, tracking and processing the information required in the reimbursementcontract and data call and shall be used for purposes related to providing a wide rangeof administrative services to the SBA including, but not limited to, retention,premium and interest calculations, accounting, financial reporting, exposure dataprocessing, loss reimbursement processing, and expense processing. This databasemust be in detail sufficient to meet premium formula format needs, managementreporting needs, loss summaries, etc. and must accommodate current and previouscontract years’ data. The potential exists for significant data handling and high datavolumes. Sufficient computer capacity is essential. Download/upload capabilitiesand/or electronic data sharing interchange mechanisms (e.g., File Transfer Protocol-FTP) will also be required. Data quality verification capabilities are essential to datamanagement.b. Cash Management – The FHCF’s capability to determine cash flow and availablecash balances to meet fund reimbursement and investment needs is an integral part ofthe FHCF’s management responsibilities. This requirement also includes:• Cash Collection and Application – Collection of cash as well asaccounting for cash received and its accurate application.• Pursuit of Delinquencies – Demonstrated capability for timelyidentification and pursuit of moneys due (e.g., premium).• Reporting – Demonstrated ability to provide timely reports on cashreceipts and expenditures.c. Accounting and Banking Resources – The ability to calculate and bill premium andinterest, process receipts and disbursements of premium, claims, and expense fundsalong lines to be described by the SBA is necessary. The Respondent must alsocoordinate, monitor and communicate with the banking resources established by theSBA.d. Financial Reporting – Financial reporting, on a monthly basis, must be a provencapability including familiarity with insurance and reinsurance accounting. Suchreporting must meet generally accepted accounting principles and other requirementsspecified by the SBA or the State of Florida. Financial reporting, related tooutstanding bond/note issues or other financial instruments, will also be required forthe FHCF Finance Corporation as specified by the SBA. The Respondent will alsoprovide support for the SBA’s independent financial auditor in conjunction with theannual financial audit, including but not limited to, scheduling the audit, providingprocess documentation and accounting records, and assisting in drafting andreviewing the final audit report.23

e. Management Reporting Capability – The capability of supporting managementreporting, including financial statements, is essential to FHCF management. Theseneeds will encompass the ability to combine contract, data call, loss data, and otherinformation in reporting on the FHCF’s status. Proper audit trails should be part ofall processing and reporting functions. Quick response on special inquiry and ad hocreporting requests from the SBA is essential.f. Administration of Reimbursement Contract Execution and Data Call Submissions –The Respondent will help develop and update appropriate reimbursement contractand data call language, mail documents to participating insurers, track the submissionand return of contract forms and data call information, follow up on any incompleteinformation received or delinquencies, and regularly report the status of contractexecution and data call submissions to the SBA. The Respondent will coordinate theapproval process and receipt of information from companies requesting exemptionfrom the FHCF.g. Renewal Processing – Issuance of contract renewals, including associated premiumcomputation, using existing or new premium formulas, as well as incorporation ofendorsements or amendments, must be accomplished in a timely and accuratemanner.h. Exposure Data Processing – Each participating company is required to submitexposure data annually by September 1. The timely and accurate processing of thisdata is critical to the premium calculations, loss reimbursements and exposureexaminations. Before the September 1 data submission is filed, participatingcompanies often submit information related to the data submission (e.g., constructioncode mappings) seeking the FHCF’s approval of their reporting methods. Once thedata is submitted and a premium is calculated, the final premium billing is sent tocompanies in November. Premium calculations for purposes of loss reimbursementsneed to be completed as quickly as possible to avoid delays in reimbursing acompany’s losses. The FHCF’s exposure examinations begin October 1 and thedetails from the data submission are used in those examinations. The Respondentmust demonstrate the ability to process this large volume of data to meet therequirements of the FHCF. Also, the Respondent must demonstrate the steps thatwould be taken to ensure the data is processed accurately. Also, list steps theRespondent would take to ensure participants get the necessary approvals neededprior to the data submission on September 1. The Respondent should demonstrate thecapability to continue to process and track resubmissions of data throughout thecontract year and the ability to provide guidance to participants on reporting issuesthat occur throughout the year. The Respondent must demonstrate whether itcurrently has the capabilities, or could have in the future, to develop and maintain anonline system for companies to electronically file data submissions. The Respondentwould also be required to identify unusual trends in aggregate exposure data reportedfrom year to year in an attempt to identify any potential reporting errors.24

i. Claims Processing – The FHCF must be able to accurately calculate reimbursementsto participants as quickly as possible. The Respondent must have the capability toprocess a large volume of loss reports to ensure the accuracy and timeliness ofreimbursements. This will involve verification of insurer retentions, the handling ofrequests for advances for certain insurers, protection against overpayment, putting inplace validation/verification processes to determine reasonableness of reimbursementrequests, reviewing Detailed Claims Listings as required by the SBA, etc. TheRespondent must demonstrate the capacity to develop and maintain an online systemfor participants to report claims. The response needs to include how the systemwould be set up, including the measures taken to secure the data. Also, theRespondent must indicate how the system would be maintained. Completely describeyour claims handling process and your organization's capabilities to respond to alarge hurricane loss or multiple hurricane losses. How quickly could yourorganization respond and what type of additional resources (personnel and other)would be needed?j. Client Communications – The ability to handle complaints, inquiries, or troubleshootissues raised by participating insurers is critical to a smooth administrative process.Florida insurers must be able to easily access the FHCF administrative serviceprovider. The respondent must have the capability to produce and maintain aninternet website, under the direction of the SBA. The Respondent also, incoordination with the SBA, must produce an annual Member Handbook, as well aswork with the SBA on its development and updating of the frequently askedquestions annually. The Respondent must be available to participate in FHCFmeetings such as rule workshops and hearings, Advisory Council meetings,participating insurer workshops, and other related events. The Respondent will beresponsible for assisting with organizing and conducting an annual participatinginsurers workshop. Typically the workshop consists of one and one-half days with aneducational format and approximate attendance of 160 people. The Respondent willcoordinate with FHCF staff in planning the program, development of the agenda, andinviting appropriate speakers and/or panel participants. Describe any events you havehosted for educating customers or clients. This service should be included in theproposed fees; however, do not indicate any fee information here.k. FHCF Examination Programs – The Respondent must also support the FHCF’sexposure and loss examination programs by producing reports as specified by theSBA, which may include, but is not limited to, summary memos of individualcompany submissions and resubmissions, tracking, reviewing, and reporting onresubmissions, and assisting with problems that arise during the examination process,as well as producing reports and documentation related to advances and lossreimbursements. The Respondent must also be able to review corrected loss reportsas directed by the SBA after an examination has been completed. As requested by theFHCF, the Respondent is also required to attend examination training and planningmeetings. Quick response on special inquiry and ad hoc reporting requests from theSBA is essential.25

F. Approachl. Commutation of Losses – The Respondent must be able to assist the FHCF in thecommutation of losses, which includes but is not limited to, producing reports asspecified by the SBA, developing and maintaining tracking reports, reviewingcommutation documentation of outstanding losses, and participating in negotiationswith participating insurers.m. Actuarial Services – While the scope of this part of the ITN does not include actuarialservices or hurricane modeling services related to determining the premium formula,support for actuarial services is helpful. Discuss the actuarial capabilities of yourorganization. Discuss how the SBA would benefit from these services as part of theadministrative services provided to the FHCF.n. SSAE 16 – The Respondent will provide support to the SBA and the SBA’s serviceprovider in conjunction with the annual SSAE 16 (SOC 1) or similar review of theRespondent’s internal controls. This includes assisting with the drafting and reviewof the control objectives, providing process documentation, participating in testing,and assisting with the review of the final report.o. Other Administrative Capabilities – The Respondent should elaborate on itscapabilities to provide any other administrative services which are not listed abovebut which it believes are essential for the sound administration of the FHCF. Theseother services should be included in the proposed fees; however, do not indicate anyfee information here.Considering the nature of the work proposed in this ITN, describe in general your approach toproviding administrative services to the SBA.G. Other Advisory RolesThe Respondent is expected to provide advice to the SBA on a number of matters pertinent to theoperation of the FHCF. The issues that may confront the SBA may include reinsurance, capitalmarkets, Florida property insurance market issues, and actuarial and legislative analysis. TheRespondent is expected to stay current with appropriate markets and related topics. Thiscapability will allow the SBA to fulfill its obligation to consider the appropriateness of programsit may institute to protect and maximize the effectiveness of the FHCF. Define how theRespondent can benefit the FHCF in other advisory role(s).H. SBA Insurance Capital Build-up Incentive Program (Surplus Note Program)The Respondent shall provide administrative services for the Surplus Note Program created bythe Florida legislature in 2006 in Section 215.5595, Florida Statutes, including, but not limitedto, the following: 1) the calculation, preparation, and distribution of invoices for quarterlyprincipal, interest, and penalty payments made by insurers to the SBA for an outstanding surplusnote, and 2) report on the Surplus Note Program as determined by the SBA. The fee proposal for26

the administration of the Surplus Note Program must be included in Section III, E as a separatefee.I. Protection of Confidential InformationAny information made available to the Respondent, which is received or reviewed whileperforming administrative services, is confidential in accordance with Section 215.557, FloridaStatutes, and shall not be disseminated to anyone outside the SBA. The strict confidentiality ofany information made available to the Respondent while performing administrative services shallbe maintained. This confidentiality shall not expire upon termination of the awarded contract,but shall survive unless and until the Respondent receives written permission from the SBA torelease or disseminate to individuals outside the SBA. Describe your organization’s capability tocomply with the FHCF’s expectation of maintaining confidentiality and define measures forprotecting and destroying confidential information, including capabilities for maintaining asecure site for storage of archived records.J. LimitationsDiscuss any limitations upon the Respondent’s services, which would require an extra cost to theSBA. (Do not reveal the cost here). If none, please indicate this.K. Technology1. Describe your organization’s technology support structure.2. Describe your organization’s systems capability for developing, implementing, andmaintaining automated solutions such as web based reporting programs.3. Describe the computer related software experience of the primary staff who will beassigned to this contract.L. ImplementationEstimate the startup time that would be required to implement the necessary staff, facility,computer system, etc. to be fully operational in order to carry out the necessary administrativefunctions of the FHCF. Give an example of a timeline to show your approach. What documentsdo you anticipate needing to implement this program?27

Appendix II: Services Questionnaire -Actuarial Consulting Services______________________________________________Responses to each item should appear in the same order as listed in this ITN. The Respondentmust give clear, concise, quantifiable replies to all questions, restating each question in bold facetype and using no smaller than 10 point font, with its response directly below. The SBA requiresdirect answers to each item and does not require generalized marketing information. Tables andgraphs are exempt from the font requirement, but must be readable.A. Executive SummaryProvide a brief summary within which you summarize the key value and distinguishing featuresof your organization. Ensure that you identify how the organization, team assigned and servicesoffered are designed to provide exceptional services to the FHCF.B. Organization’s Experience and Qualifications1. Describe briefly your organization’s background/history, ownership structure, primarylocation(s) and size (number of offices).2. List all insurance coverage your organization has for errors & omissions and anyprofessional liability insurance.3. Has the Respondent or key personnel previously had a contract with the SBA? If so, wasthat contract not renewed? Was the contract terminated?4. Describe any anticipated changes to your organization’s basic ownership structure or anyother significant changes anticipated in your organization, its management or keypersonnel.5. Demonstrate the financial and human resource capabilities available to provide therequired services. A proven track record is essential.6. The SBA supports and encourages diversity and participation of small and minoritybusiness enterprises in contracting. In order to identify minority, woman-owned, anddisabled veteran businesses or other organizations which actively pursue providingopportunities to women and minorities, provide the following information. Indicate ifyour organization is a minority-owned business or a woman-owned business and identifythe principal shareholders who qualify your organization. Provide a brief description ofyour organization’s minority hiring/affirmative action program.Appendix II 28

C. Experience, Qualifications, Specialized Capability, and Expertise of Respondent’sPersonnel/Professional Staff1. State the names and locations of key personnel currently employed with yourorganization who will be assigned to this project and provide biographical information oneach person, including whether they are either an Associate or Fellow in the CasualtyActuarial Society and any other professional or academic qualifications and experience.This information should include each individual’s specific reinsurance related actuarialexperience with residual market mechanisms and catastrophe insurance pools andspecific experience related to the review and valuation of property claims and losses.2. Describe how the Respondent ensures that the work of its personnel adheres to ActuarialStandards of Practice and the Actuarial Code of Professional Conduct.3. Identify courts, regulatory or legislative hearings and administrative proceedings inwhich the respondent’s personnel were admitted as expert actuarial witnesses.4. Provide an organizational chart showing functions, positions, and titles of those identifiedabove.5. Describe any plans to use subcontractors or third parties for any of the services to beprovided to the SBA. Specifically state the percent of services that will be dependentupon the subcontractors. The SBA reserves the right to approve or disapprove anysubcontractors as part of the negotiation process. Also, any subcontractors would berequired to meet requirements for maintaining confidentiality of data.D. Capability/Resources to Provide Required Services1. Describe your organization’s qualifications for providing reinsurance or similar relatedactuarial consulting services for governmental or quasi-governmental organizations suchas residual markets and catastrophic pools.2. Provide a list of three client references (name, phone number, and mailing address)whom the SBA may contact. Provide a list of three clients (name, phone number, andmailing address) who have terminated, cancelled or non-renewed your services within thepast three years. If none, please indicate this.E. Services RequiredDescribe your organization’s capability to provide the following types of services:1. Develop the FHCF reimbursement premium formula and provide documentation (themost recent Ratemaking Formula Report can be accessed through the FHCF websiteunder “Insurer Information”).2. Establish actuarially indicated rates according to rating factors determined by the SBA.Appendix II 29

3. Evaluate and recommend potential new rating factors as requested by the SBA.4. Define the analytical and consulting services to be provided by hurricane catastrophemodeling vendors for the purposes of establishing rates and estimating losses to theFHCF. Recommend strategies to optimize the use of multiple hurricane catastrophemodels. Assist the SBA in the selection and negotiation of hurricane catastrophemodeling vendor(s).5. Present actuarial findings, including the premium formula, and provide advice,assistance, and participation in any presentations to, or hearings and proceedings before,the SBA Trustees, the FHCF Advisory Council, legislative staffs or committees, andother governmental agencies with oversight responsibilities.6. Provide advice to the SBA on a number of matters pertinent to the operation of the FHCFincluding, but not limited to, reinsurance, capital markets, and Florida property insurancemarket issues.7. Coordinate with SBA staff, the FHCF administrator, and other service providersregarding issues related to the reimbursement contract, data call, and examinationprograms, which impact FHCF premium rates or the premium formula.8. Evaluate FHCF exposure data and other inputs and assumptions used in hurricane lossmodeling. Evaluate output data from hurricane loss models and the efficacy ofcombining outputs from several models.9. Develop and evaluate other data as required in the ratemaking procedure.10. Document the data, ratemaking procedures, assumptions and reliances used to developindicated rates, in accordance with Actuarial Standards of Practice on documentation.11. Provide the SBA with loss reserving services associated with hurricane losses of theFHCF thereby helping to establish current reserves, loss payment patterns, currentcapacity and future projected capacity, and the final commutation of losses.12. Analyze and review legislative proposals from an actuarial perspective to assist the FHCFin developing legislative and policy positions.F. Premium Formula ApproachDescribe your organization’s approach to updating and revising the current FHCF premiumformula (available on the FHCF website at http://fhcf.paragonbenfield.com/pdf/12ratereport.pdf.)Is there anything your organization would propose to do differently from the way the premiumformula has been developed in the past? What are some changes you would make in the future,and how might these changes impact the FHCF reimbursement contract, data call, and/orexamination programs?Appendix II 30

G. Other Advisory RolesThe Respondent is expected to provide advice to the SBA on a number of matters pertinent to theoperation of the FHCF. The issues that may confront the SBA may include reinsurance, capitalmarkets, Florida property insurance market issues, and actuarial and legislative analysis. TheRespondent is expected to stay current with appropriate actuarial approaches, changes in theinsurance and reinsurance markets, and other related topics. Define how the Respondent canbenefit the FHCF in other advisory role(s).H. Protection of Confidential InformationAny information made available to the Respondent, which is received or reviewed whileperforming actuarial services, is confidential in accordance with Section 215.557, FloridaStatutes, and shall not be disseminated to anyone outside the SBA. The strict confidentiality ofany information made available to the Respondent while performing these services shall bemaintained. This confidentiality shall not expire upon termination of the awarded contract, butshall survive unless and until the Respondent receives written permission from the SBA torelease or disseminate to individuals outside the SBA. Describe your organization’s capability tocomply with the FHCF’s expectation of maintaining confidentiality and define measures forprotecting and destroying confidential information, including capabilities for maintaining asecure site for storage of archived records.I. IndependenceThe successful Respondent must demonstrate that it is capable of acting independently, asrequired by Section 215.555(5)(b), Florida Statutes, in its development of the premium formula.Discuss why your organization should be considered as an “independent consultant.”Independence means that the actuarial consultant’s advice or work product is not controlled by orunduly influenced by other parties and that there is no conflict of interest which exists due to amonetary or contractual relationship, which enables the actuarial consultant to directly benefitfrom such advice or work product.J. LimitationsDiscuss any limitations upon the Respondent’s services, which would require an extra cost to theSBA. (Do not reveal the cost here). If none, please indicate this.Appendix II 31

Appendix III: Service Requirements -Affirmation StatementBy inclusion and execution of the statement provided herein, each Respondent shall certify that:The selection of the Respondent will not result in any current or potential conflict ofinterest with the SBA or any participating insurer. Alternately, should any potential orexisting conflict be known by the Respondent, the proposal shall specify the party withwhich the conflict exists or might arise, the nature of the conflict and whether theRespondent would step aside or resign from that engagement creating the conflict.The proposal is made without prior understanding, agreement, or connection with anycorporation, Respondent, or person submitting a proposal for the same services, and is inall respects fair and without collusion or fraud.The selection of the Respondent will not violate Section 215.684, Florida Statutes, whichprohibits the State from selecting certain providers that have been convicted of or entereda plea of nolo contendere to fraud within a period of two years of such conviction.The Respondent and the agents, officers, principals, and professional employees thereofhave not and will not participate in any communication prohibited in this ITN.The Respondent’s responses to the ITN are those of the Respondent and have not beencopied or obtained from any other Respondent responding to any other ITN orcompetitive proposal whether in Florida or elsewhere either in the past or present.If retained for both administrative and actuarial consulting services, the Respondent willmaintain independent actuaries pursuant to 215.555 (5)(a), Florida Statutes.The Respondent hereby agrees to abide by all conditions of this ITN for AdministrativeServices and/or Actuarial Consulting Services and certifies that all information providedin this response is true and correct, that I am authorized to sign this response for theRespondent and that the Respondent is in compliance with all requirements of this ITN,including but not limited to, requirements in this exhibit._________________________________________________Authorized Signature (Manual)_________________________________________________Name and Title (Typed)_________________________________________________Date (Typed)Appendix III 32

EXHIBIT I: Organizational ChartFlorida Hurricane Catastrophe FundJack NicholsonChief Operating OfficerLeonard SchulteDirector of Legal Analysis &Risk EvaluationGina WilsonDirector of ExaminationsAnne BertDirector of OperationsTracy AllenSenior AttorneyMarcie VernonSenior Examiner AnalystSteve SzypulaManager of FinancialOperationsJessica OrrSenior Examiner AnalystMelissa GunterManagement ReviewAnalystPatti ElsberndAudit Program AnalystRarmona WorleyBudget AnalystLinda GuyasAdministrative Assistant,Audit ProgramDonna SirmonsManagement ReviewAnalystRyan MathesOPS33