FLORIDA INSURANCE GUARANTY ASSOCIATION

 

I.    PURPOSE: The Florida Insurance Guaranty Association (“FIGA”) establishes and maintains a service-oriented operation for processing covered claims of insolvent members. FIGA is a nonprofit corporation created by the Florida Legislature in 1970. FIGA services pending claims by or against Florida policyholders of member insurance companies which become insolvent and are ordered liquidated. FIGA’s membership is composed of all Florida licensed direct writers of property or casualty insurance.

 

II.                  STATUTES GOVERNING FLORIDA INSURANCE GUARANTY ASSOCIATION
 
631.50 Title.
631.51 Purposes.
631.52 Scope.
631.53 Construction.
631.54 Definitions.
631.55 Creation of the association.
631.56 Board of directors.
631.57 Powers and duties of the association.
631.58 Plan of operation.
631.59 Duties and powers of department and office
631.60 Effect of paid claims.
631.61 Nonduplication of recovery.
631.62 Prevention of insolvencies.
631.63 Examination of the association.
631.64 Recognition of assessments in rates.
631.65 Prohibited advertisement or solicitation.
631.66 Immunity.
631.67 Stay of proceedings; reopening of default judgments.
631.68 Limitation; certain actions.
631.70 Attorney's fee.

 

III.                PARTICULAR STATUTES OF INTEREST GOVERNING FIGA

 

631.57- Powers and Duties of the association

-          FIGA’s limits on payment of each covered claim

o        Deductible of $100.00 (in addition to Policy deductible)

o        Payment up to $300,000 for claim; unless

o        A condominium association or homeowners’ association, when the association has a responsibility to provide insurance coverage on units within the association:

§         The obligation shall include that amount of each covered property insurance claim which is less that $100,000 multiplied the number of units.       

·         No case law interpreting statute

631.66- Immunity

-          There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, the association or its agents or employees, the board of directors, the Chief Financial Officer, or the department or office or their representatives for any action taken by them in the performance of their powers and duties under this part. Such immunity shall extend to the participation in any organization of one or more other state associations of similar purposes and to any such organization and its agents or employees.

 

631.67- Stay of Proceedings

-          All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court or before any quasi-judicial body or administrative board in this state shall be stayed for 6 months.

 

631.68- Limitations; certain actions

-          A covered claim as defined herein with respect to which settlement is not effected and suit is not instituted against the insured of an insolvent insurer or the association within 1 year after the deadline for filing claims, or any extension thereof, with the receiver of the insolvent insurer shall thenceforth be barred as a claim against the association and the insured.

 

631.70- Attorney’s fee

-          The provisions of 627.428 providing for an attorney’s fee shall not be applicable to any claim presented to the association under the provisions of this part, except when the association denies by affirmative action, other than delay, a covered claim or a portion thereof.

 

IV.                HOW TO FILE A FIGA CLAIM

 

A.                  New Claim (date of loss prior to 7/1/2006)

                                                               i.      Contact FIGA

                                                             ii.      Florida Insurance Guaranty Association
P O Box 10366
Jacksonville, Florida 32247-0366
1-800-746-1045 (toll-free) or 1-866-928-4310 (toll-free)

                                                            iii.      They will issue claim number and adjuster

B.                  Claim (or suit) previously filed with Insurance Company

                                                               i.      Contact FIGA to determine if the claim is in their system

                                                             ii.      If so, they will give you the adjuster name and number

                                                            iii.      If not, give them all information to ensure that claim is reported

V.                  CONTACTING DEPARTMENT OF FINANCIAL SERVICES:

-          You do not need to contact DFS if you have reported the claim to FIGA.

-          However, if the claim exceeds the statutorily mandated limits for FIGA then you must file a Proof of Claim form with DFS to protect your client’s rights to seek the monies not paid by FIGA.

-          Be careful, there is a deadline for filing a Proof of Claim with DFS.

o        That deadline has not been set for Poe claims

 

VI.                ACTIVE INSOLVENCIES CURRENTLY BEING HANDLED  BY FIGA (as of 6/21/06)

1. Acceleration National Ins. Co.

2. American Eagle Ins. Co.

3. American Horizon Ins. Co.

4. American Superior Ins. Co.

5. Aries Ins. Co.

6. Armor Ins. Co.

7. Casualty Reciprocal Exchange

8. Commercial Cas. Ins. of N.C.

9. Credit General Ins. Co.

10. Dealers Ins. Co.

11. Delta Casualty Co.

12. Far West Ins. Co.

13. Fidelity National Ins. Co.

14. Fortune Ins. Co.

15. Fremont Indemnity Co.

16. Great Republic Ins. Co.

17. The Home Ins. Co.

18. Industrial Fire & Casualty Ins. Co.

19. Legion Ins. Co.

20. The Millers Ins. Co.

21. PHICO Ins. Co.

22. The Protective National Ins. Co. of   

Omaha

23. Queensway Casualty Ins. Co.

24. Reliance Ins. Co.

25. Security Indemnity Ins. Co.

26. South Carolina Ins. Co.

27. State Capital Ins. Co.

28. Unisource Ins. Co.

29. United Southern Assurance Co.

30. Villanova Ins. Co.

31. Associated Business & Commerce

 

Note: Does not include companies with estates still open in receivership, but no current FIGA activity such as the following:

o        Southern Family Insurance Company

o        Atlantic Preferred Insurance Company

o        Florida Preferred Insurance Company

 

VII.       FIGA CLAIM ACTIVITY (as of 6/21/06)

 FIGA Open Claims and Reserves as of 5/31/2006:

 

Number of Estates Open With Activity (see section VI, above)

31

 

Number of Open Claims

1,131

 

Outstanding Reserves

$ 48,145,434

 

VIII.      SPECIAL THOUGHTS ON MAKING CLAIMS AGAINST FIGA FOR CONDOMINIUM ASSOCIATIONS RESULTING FROM DAMAGE TO “COMMON AREAS”

 

F.S. §631.57 specifies the limits on what FIGA will pay for a claim for damages. It also makes an exception for condominium associations that provide insurance for the individual units.

 

F.S. §631.57(1)(a)(2) states:

 

“The obligation under subparagraph 1. shall include only that amount of each covered claim which is in excess of $100 and is less than $300,000, except with respect to policies covering condominium associations or homeowners' associations, which associations have a responsibility to provide insurance coverage on residential units within the association, the obligation shall include that amount of each covered property insurance claim which is less than $100,000 multiplied by the number of condominium units or other residential units; however, as to homeowners' associations, this subparagraph applies only to claims for damage or loss to residential units and structures attached to residential units.”

There is no case law interpreting this portion of the statute. It could be argued that in cases involving a Condominium Association policy which  that does not “provide insurance coverage on residential units within the association” FIGA will only pay the Association a maximum of $300,000. It could also be argued that FIGA does not apply to Condominium Associations at all where the policy does not “provide insurance coverage on residential units within the Association...”

 

On FIGA’S website (www.figafacts.com) its position on the maximum payment of claims is as follows:

 

“The maximum amount FIGA will cover is $300,000 with special limits applying to (1) damages to structure and contents on homeowners’ claims and (2) on condominium and homeowners’ association claims.  For damages to structure and contents on homeowners’ claims the FIGA cap is an additional $200,000.  For condominium and homeowners’ association claims the cap will be $100,000 multiplied by the number of units in the association.  No claim will be paid in excess of this cap.”