Business Context and Reporting Period
This Form 8-K was filed by Assurant, Inc. on October 7, 2013, reporting a significant regulatory agreement reached by its subsidiary, American Security Insurance Company, with the Florida Office of Insurance Regulation.
Key Financial Metrics
The filing provides historical premium data for Florida operations in 2012 but does not report current period revenue, profit, cash flow, or liquidity metrics.
- 2012 Florida Direct Earned Premiums: $510 million
- 2012 Florida Net Earned Premiums (pre-catastrophe reinsurance): $372 million
Material Changes and Operational Adjustments
American Security Insurance Company agreed to the following changes regarding lender-placed hazard insurance in Florida:
- Rate Reduction: A 10 percent reduction in rates, reflecting recent experience. These rates are expected to be effective for new and renewing policies starting in the first quarter of 2014 upon approval.
- Practice Modifications: Elimination of commissions and client quota-share reinsurance arrangements to meet new provider requirements. These practice changes are expected to take effect one year following the agreement.
Outlook, Risks, and Forward-Looking Statements
Management notes that the new rates and practices are subject to regulatory approval and specific effective dates. The filing includes a cautionary statement that actual results may differ materially from estimates due to various factors. Assurant, Inc. explicitly states it undertakes no obligation to update forward-looking statements based on new information. Investors are directed to the 2012 Annual Report on Form 10-K for a detailed discussion of risk factors.
Key Facts for Investor Verification
- Confirmation of the effective date for the 10% rate reduction in Florida (anticipated Q1 2014).
- Impact of the 10% rate reduction on future revenue and profitability for the Florida segment.
- Financial implications of eliminating commissions and client quota-share reinsurance arrangements.
- Regulatory approval status of the Consent Order and rate filing.