REMINDER:  Insurers seeking limited apportionment company (“LAC”) status for 2010 must petition the Florida Office of Insurance Regulation (“OIR”) within the first 90 days of 2010.  Applications received after this deadline will not be considered. Companies that had LAC status in 2009 must renew it this year.

LACs are those that have surplus as regards policyholders of $25 million or less, and write 25 percent or more of their total nationwide property insurance premium in Florida.

The main benefits of LAC status are:

the ability to purchase a low-cost drop-down layer of reinsurance from the Florida Hurricane Catastrophe Fund, a benefit that is also available to insurers that purchased such coverage in 2008 and those approved to participate in the Insurance Capital Build-Up Incentive Program; and
the ability to pay any regular assessments that may be levied by Citizens Property Insurance Corporation (“Citizens”) for its high-risk account on a monthly basis, as such amounts are recouped from insureds, provided that the full amount of the regular assessment is paid within 12 months after being levied by Citizens.  Companies that do not have LAC status must pay the full amount of any Citizens regular assessments within 30 days after they are levied.  
LACs also are eligible for a deferment of a regular assessment levied by Citizens, but only if the OIR determines that any such regular assessment will result in an impairment of the LAC’s surplus.

In view of the need to file the application prior to the expiration of the applicable deadline, companies should carefully evaluate their circumstances and apply for LAC status in a timely manner, if appropriate.