New Law Clarifies FIGA Recoupment Receivables are Admitted Assets
The legislature passed HB 189 in the 2015 regular session relating to the admissibility of receivables arising from the recoupment of Florida Insurance Guaranty Association (FIGA) assessments. Upon now being approved by the Governor, the new law takes effect July 1, 2015.
The new law relates to FIGA assessments that are paid by an insurer before being collected from policyholders and therefore result in a receivable for the amount the insurer expects to collect in the future. Under the new law, this receivable will be considered an admitted asset as long as the amount of the receivable is likely to be realized. The asset must be established and recorded separately from the assessment liability.
In some situations, an insurer will not be likely to realize the amount of a receivable. For example, if an insurer is significantly reducing its writings or withdrawing from the state, it likely would not be able to recover the amount it paid in assessments. In that case, the insurer would be required to reevaluate the amount of the receivable and reduce it to a level the insurer believes is likely to be collected.