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
June 13, 2007
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Date of report (Date of earliest event reported)
Universal Insurance Holdings, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-20848 65-0231984
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(State or other jurisdiction (Commission file number) (IRS Employer
of incorporation or organization) Identification No.)
1110 W. Commercial Blvd. Suite 100, Fort Lauderdale, Florida 33309
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (954) 958-1200
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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):
[ ] Written communication pursuant to Rule 425 under the Securities Act (17
CFR 230.425).
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12).
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)).
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)).
ITEM 8.01 Other Events.
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On June 13, 2007 Universal Insurance Holdings, Inc. (the "Company") announced
the completion by Universal Property and Casualty Insurance Company ("UPCIC"),
its wholly owned subsidiary, of its 2007-2008 reinsurance program effective June
1, 2007. The announcement, a copy of which is furnished as Exhibit 99.1 to this
report, is incorporated herein by reference. The following provides a
description of the program.
Effective June 1, 2007, UPCIC entered into a quota share reinsurance treaty and
excess per risk agreements with various reinsurers. Under the quota share
treaty, through May 31, 2008, UPCIC cedes 50% of its gross written premiums,
losses and LAE for policies with coverage for wind risk with a ceding commission
equal to 31% of ceded gross written premiums. In addition, the quota share
treaty has a limitation for any one occurrence of 40% of Gross Premiums Earned,
not to exceed $100,000,000 (of which the Company's net liability on the first
$100,000,000 of losses in a first event scenario is $45,000,000, in a second
event scenario is $9,300,000 and in a third event scenario is $9,300,000) and a
limitation from losses arising out of events that are assigned a catastrophe
serial number by the Property Claims Services ("PCS") office of 112% of Gross
Premiums Earned, not to exceed $280,000,000. Effective June 1, 2007 through May
31, 2008, UPCIC entered into a multiple line excess per risk agreement with
various reinsurers. Under the multiple line excess per risk agreement, UPCIC
obtained coverage of $1,300,000 in excess of $500,000 ultimate net loss for each
risk and each property loss, and $1,000,000 in excess of $300,000 for each
casualty loss. A $5,200,000 aggregate limit applies to the term of the contract.
Effective June 1, 2007 through May 31, 2008, UPCIC entered into a property per
risk excess agreement covering ex-wind only policies. Under the property per
risk excess agreement, UPCIC obtained coverage of $300,000 in excess of $200,000
for each property loss. A $2,100,000 aggregate limit applies to the term of the
contract. Effective June 1, 2007 through May 31, 2008, under an excess
catastrophe contract, UPCIC obtained catastrophe coverage of $576,000,000 in
excess of $100,000,000 covering certain loss occurrences including hurricanes.
The contract contains a provision for one reinstatement in the event coverage is
exhausted; additional premium is calculated pro rata as to amount and 100% as to
time. Effective June 1, 2007 through May 31, 2008, UPCIC purchased a
reinstatement premium protection contract which reimburses the Company for its
cost to reinstate the catastrophe coverage of the first $426,000,000 in excess
of $100,000,000. Effective June 1, 2007, UPCIC also obtained subsequent
catastrophe event excess of loss reinsurance to cover certain levels of the
Company's net retention through three catastrophe events including hurricanes.
UPCIC also obtained coverage from the Florida Hurricane Catastrophe Fund
("FHCF"). The approximate coverage is estimated to be for 90% of $1,071,600,000
in excess of $209,900,000. Also at June 1, 2007, the FHCF made available, and
the Company obtained, $10,000,000 of additional catastrophe excess of loss
coverage with one free reinstatement of coverage to carriers qualified as
Limited Apportionment Companies or companies that participated in the Insurance
Capital Build-Up Incentive Program, such as UPCIC. This particular layer of
coverage is $10,000,000 in excess of $18,600,000. The Company also purchased
Florida Hurricane Catastrophe Fund Recovery Shortfall Reinsurance in the event
the FHCF cannot fulfill its payment obligations for the 2007-2008 Hurricane
Season.
The total cost of the Company's underlying catastrophe private reinsurance
program effective June 1, 2007 through May 31, 2008 is $113,178,000 of which the
Company's cost is 50%, or $56,589,000, and the quota share reinsurers cost is
the remaining 50%. In addition, the Company purchases reinsurance premium
protection as described above which amounts to $14,213,402 of cost. The cost of
the subsequent catastrophe event excess of loss reinsurance is $11,184,125. The
estimated premium the Company plans to cede to the FHCF for the 2007 hurricane
season is $43,100,000 of which the Company's cost is 50%, or $21,550,000, and
the quota share reinsurers' cost is the remaining 50%. The Company is also
participating in the additional coverage option for Limited Apportionment
Companies or companies that participated in the Insurance Capital Build-Up
Incentive Program offered by the FHCF, the premium for which is $5,000,000 of
which the Company's cost is 50%, or $2,500,000, and the quota share reinsurers'
cost is the remaining 50%. The total cost of the Company's Florida Hurricane
Catastrophe Fund Recovery Shortfall Reinsurance is $7,715,520, of which the
Company's cost is 50%, or $3,857,760. The Company is responsible for losses
related to catastrophic events with incurred losses in excess of coverage
provided by the Company's reinsurance program which could have a material
adverse effect on the Company's business, financial condition and results of
operations.
ITEM 9.01 Financial Statements and Exhibits
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(c) Exhibits:
99.1 Press Release, dated June 13, 2007.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: June 13, 2007 UNIVERSAL INSURANCE HOLDINGS, INC.
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By: /s/ Bradley I. Meier
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Bradley I. Meier
President and Chief Executive
Officer