UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
June 3, 2008
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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 3, 2008, Universal Insurance Holdings, Inc. (the "Company") announced
the completion by Universal Property and Casualty Insurance Company ("UPCIC"),
its wholly owned subsidiary, of its 2008-2009 reinsurance program effective June
1, 2008. 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, 2008, UPCIC entered into a quota share reinsurance treaty and
excess per risk agreements with various reinsurers. Under the quota share
treaty, through May 31, 2009, 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 55% of Gross Premiums Earned,
not to exceed $150,000,000 (of which the Company's net liability on the first
$150,000,000 of losses in a first event scenario is $70,000,000, in a second
event scenario is $14,800,000 and in a third event scenario is $15,000,000) and
a limitation from losses arising out of events that are assigned a catastrophe
serial number by the Property Claims Services ("PCS") office of 164% of Gross
Premiums Earned, not to exceed $450,000,000. Effective June 1, 2008 through May
31, 2009, 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 $7,800,000 aggregate limit applies to the term of the contract
and the Company will retain the first $1,300,000 of losses above the $500,000
retention. Effective June 1, 2008 through May 31, 2009, 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, 2008 through May 31, 2009, under
an excess catastrophe contract, UPCIC obtained catastrophe coverage of
$399,000,000 in excess of $150,000,000 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, 2008 through May 31, 2009, UPCIC
purchased a reinstatement premium protection contract which reimburses the
Company for its cost to reinstate the catastrophe coverage of the first
$274,000,000 (part of $399,000,000) in excess of $150,000,000. Effective June 1,
2008, 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 $1,340,000,000 in excess of $290,000,000. Also at
June 1, 2008, 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
$29,600,000.
The total cost of the Company's underlying catastrophe private reinsurance
program effective June 1, 2008 through May 31, 2009 is $86,795,000 of which the
Company's cost is 50%, or $43,397,500, and the quota share reinsurers cost is
the remaining 50%. In addition, the Company purchases reinstatement premium
protection as described above, the cost of which is $12,266,483. The cost of the
subsequent catastrophe event excess of loss reinsurance is $12,180,000. The
estimated premium the Company plans to cede to the FHCF for the 2008 hurricane
season is $57,870,530 of which the Company's cost is 50%, or $28,935,265, 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 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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(d) Exhibits:
99.1 Press Release, dated June 3, 2008.
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 3, 2008 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