Search the web
Welcome, Guest
[Sign Out, My Account]

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
UIHC > SEC Filings for UIHC > Form 8-K on 5-Jun-2013All Recent SEC Filings

Show all filings for UNITED INSURANCE HOLDINGS CORP. | Request a Trial to NEW EDGAR Online Pro



Entry into a Material Definitive Agreement, Financial Statements

Item 1.01 Entry into a Material Definitive Agreement.

For the policy year beginning June 1, 2013, United Property & Casualty Insurance Company (UPC), our wholly-owned subsidiary, entered into excess-of-loss reinsurance agreements with several private reinsurers and with the Florida State Board of Administration (SBA), which administers the Florida Hurricane Catastrophe Fund (FHCF). The private agreements provide coverage against severe weather events such as hurricanes, tropical storms and tornadoes. The agreement with the FHCF only provides coverage in Florida against storms that the National Hurricane Center designates as hurricanes.

For the 2013 hurricane season, UPC purchased reinsurance protection in an amount approximately equal to the dollar amount of damage that computer models estimated would be caused by a one-in-100-year storm striking areas where UPC has policies in force. For a single hurricane catastrophe, UPC will pay, or "retain", the first 70% of losses up to $20 million ($14 million) of catastrophe losses and an affiliated reinsurer will pay the remaining 30% of losses up to $20 million ($6 million) before the agreements with unaffiliated reinsurers provide coverage. The unaffiliated agreements will reimburse UPC as much as $781.6 million for the first event.

Our agreement with the FHCF consists of a single layer of coverage, the mandatory layer. Under the agreement, we estimate the FHCF will provide approximately 90% of $490.6 million of aggregate coverage for covered losses in excess of $187.2 million. The premium for the FHCF agreement will be approximately $34.9 million, payable in three approximately equal installments in August, October and December 2013. The attachment point (or the point at which the FHCF becomes liable for losses), total coverage and cost under our agreement with FHCF will not be finalized until December 2013, as these amounts are subject to adjustment based on updated data regarding FHCF's participating insurers' exposure.

The 2013 private catastrophe reinsurance agreements structure coverage into layers, with a cascading feature. The attachment point of Layer 1 is net of a $20 million retention (UPC and its affiliate). Subsequent layers (Layers 2, 3 and 4) are excess of loss over the immediately preceding layer. If the aggregate limit of the preceding layer is exhausted, the next layer drops down (cascades) in its place. Additionally, any unused layer protection drops down in a second event. The excess of loss reinsurance agreement with unaffiliated private reinsurers, consisting of the first through fourth layers of coverage, will provide $340 million of aggregate coverage for covered losses in excess of $20 million. The premium for this agreement will be approximately $76.7 million, payable in four approximately equal installments in July and October 2013, and in January and April 2014. The final private agreement, a dedicated second event cover with recovery potential in subsequent events, will provide 70% of $10 million excess $10 million in a second event and 100% of $10 million excess $10 million in subsequent events, subject to aggregate contract limits, at a premium of approximately $1.998 million. Certain parts of the reinsurance program provide coverage for two years. All private insurers with whom UPC contracted either carry A.M. Best financial strength ratings of A- or higher, or have fully collateralized their maximum potential obligations in dedicated trusts.

This current report on Form 8-K contains forward-looking statements about our reinsurance program and related attachment point, total coverage and costs. These statements are subject to the Private Securities Litigation Reform Act of 1995 and are based on management's estimates, assumptions and projections. These forward-looking statements can generally be identified as such because the context of the statement will include words such as estimate, expect or words of similar nature. The actual changes to our reinsurance program and related attachment point, total coverage and costs may differ materially from those discussed in this report, depending on FHCF's capacity to pay claims and related adjustment provisions in our agreements with the SBA and private reinsurers.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

See the Exhibit Index set forth below for a list of exhibits included with this Current Report on Form 8-K.

  Add UIHC to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for UIHC - All Recent SEC Filings
Sign Up for a Free Trial to the NEW EDGAR Online Pro
Detailed SEC, Financial, Ownership and Offering Data on over 12,000 U.S. Public Companies.
Actionable and easy-to-use with searching, alerting, downloading and more.
Request a Trial      Sign Up Now

Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.