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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

(Date of earliest event reported)

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:  (954) 581-9993

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 1.01

Entry into a Material Definitive Agreement.

Federated National Insurance Company (“Federated National”), a wholly owned subsidiary of Federated National Holding Company (the “Company”), has entered into a Reimbursement Contract (the “Contract”), with The State Board of Administration of Florida (SBA).  The SBA is the agency that administers the Florida Hurricane Catastrophe Fund (“FHCF”) for the 2014-2015 hurricane season.

The Contract will reimburse Federated National for covered property losses under its homeowners’ insurance policies resulting from hurricanes that cause damage in the State of Florida, through May 31, 2015.

Under this Contract, the FHCF will provide about $531.0 million of aggregate seasonal coverage for covered losses in excess of approximately $225.0 million subject to a 10% Company participation. Federated National’s premium for the FHCF reinsurance coverage will be approximately $41.4 million payable in three installments between August 2014 and December 2014.  The actual attachment point, total coverage and cost may vary significantly as we continue to write new business and will not be finalized until December 31, 2014.

As is common practice within the insurance industry, a portion of the risks insured under our policies are transferred to other companies through the purchase of reinsurance.  The Company routinely purchases reinsurance through excess of loss type treaties from both the FHCF and multiple private reinsurance carriers.  Federated National’s existing catastrophe reinsurance treaties with private reinsurance carriers from 2013 are in effect through June 30, 2014.  The Company will be negotiating its new private excess of loss type treaties in the coming months which will afford additional coverage to the Company, in conjunction with the coverage provided by the FHCF, and will have a term of one year beginning July 1, 2014.

The description of the terms of the Contract is qualified in its entirety by reference to the full text of the Reimbursement Contract which is filed as Exhibits 10.1 to this Current Report on Form 8-K and are incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

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EXHIBIT INDEX

 

 

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