Insurer Suit Against Cat Fund Dismissed For Not Exhausting Administrative Remedies
Sunshine State Insurance Company’s suit in Leon County Circuit Court that sought declaratory and injunctive relief against the State Board of Administration (SBA) has been dismissed because the insurer failed to exhaust its administrative remedies. The lawsuit related to loss reimbursement in connection with the SBA’s Florida Hurricane Catastrophe Fund (Cat Fund) Reimbursement Contract for the 2005 Contract Year.
The SBA contends that it is not obligated to reimburse insureds’ attorneys’ fees paid as a result of negotiated settlement or court order because they are “extra contractual obligations.” Consequently, the SBA is holding payments to Sunshine State until a new 2005 Loss Report is submitted that does not include insureds’ attorneys’ fees as covered losses. Sunshine State contends that it is proper industry best practice for an insurer to report insureds’ attorneys’ fees as “losses,” and therefore it should be reimbursed by the Cat Fund.
The SBA successfully argued in its Motion to Dismiss that the Cat Fund’s Reimbursement Contract provides administrative remedies to the insurer and that the insurer cannot leapfrog those remedies by seeking a judicial determination from the circuit court. The judge agreed and issued an Order granting the SBA’s Motion to Dismiss without prejudice. Sunshine State has requested an administrative hearing and that proceeding is pending at the Florida Division of Administrative Hearings.