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