OIR Issues Memorandum on Surplus Requirements
The Florida Office of Insurance Regulation has issued an informational memorandum (OIR-11-05m) summarizing the minimum surplus requirements for property and casualty insurers as revised in SB 408. The bill was signed into law on May 17, 2011, and the surplus requirements became effective at that time.
The new law specifies that a new insurer writing residential property insurance must have at least $15 million in capital and surplus. This is an increase from the $5 million requirement under prior law.
For an existing insurer writing the residential lines, the surplus requirement is stepped up from the prior $4 million minimum. Insurers are now required to reach $5 million, which will be the minimum until July 1, 2016. At that time, the minimum will increase to $10 million. Five years later, on July 1, 2021, the minimum will go up to $15 million.
These minimums are in addition to other regulatory requirements such as the obligation to maintain surplus equal to or greater than 10 percent of liabilities.