Overview:

The Florida Optional Reinsurance Assistance (FORA) program that established Section 215.5552, Florida Statutes, was created by the Florida Legislature during Special Session 2022A and signed into law on December 16, 2022. The FORA program, administered by the State Board of Administration (SBA), is a one-year program designed to operate in conjunction with the Reinsurance to Assist Policyholders (RAP) program and provides four optional layers of reinsurance. The Florida Legislature has allocated up to $1 billion in General Revenue funds to support this program.

Eligible Insurers:

In order to be eligible for coverage under the FORA program, an insurer must be a participating insurer in the Florida Hurricane Catastrophe Fund (FHCF) as of November 30, 2022. Citizens Property Insurance Corporation (Citizens) is not eligible for FORA coverage. 

The first three layers of FORA are designed to provide coverage only for the RAP insurers that were required to participate in Contract Year 2022-2023. Therefore, RAP insurers for Contract Year 2023-2024 are not eligible to select FORA layers 1 through 3, because that coverage would duplicate the RAP coverage already in place.  All insurers who select FORA layers 1 through 3, and RAP insurers in Contract Year 2023-2024, are eligible to select layer 4.

Program Details:

A FORA insurer’s coverage in layers 1 through 4 will be based on their FHCF market share, with layer 1 positioned directly below the FHCF retention. Layers 1 through 3 are designed to sit adjacent to the effective 2023 RAP industry layer. The combined coverage available in layers 1 through 3 is approximately $0.9 billion, and the coverage available in layer 4 will be based on the remaining industry limit from the $1 billion of General Revenue funds after the take-up of coverage in layers 1 through 3 plus all FORA premium collected. Please see the table below for detailed information on each layer of the FORA program.

*Rate on line is the ratio of premium paid to limit

FORA insurers will be reimbursed for 100% of their covered losses from the two covered events with the largest losses in excess of their FORA retention, not to exceed their aggregate FORA limit. In exchange for this coverage, FORA insurers will be charged a premium for each layer purchased. FORA insurers selecting multiple layers must purchase them in sequence beginning with layer 1. For example, layer 2 cannot be purchased without purchasing layer 1.

Initial retention and payout multiples will be provided for each layer of coverage. Contracts binding coverage for layers 1 through 3 must be executed no later than April 15, 2023.  When contract selections for layers 1 through 3 are finalized, the layer 4 available limit will be calculated and offered under a separate contract. Initial premiums for all selected layers of coverage will be due on July 1, 2023.  Failure to pay by this date will result in the insurer’s FORA coverage being cancelled and any executed FORA reimbursement contracts will be void.