_DFS BOR Q&A Addendum No. 1.pdf

INSURANCE BROKER OF

RECORD/REINSURANCE BROKER FOR

PROPERTY INSURANCE, CASUALTY

INSURANCE, AND RISK MANAGEMENT

CONSULTING SERVICES

INVITATION TO NEGOTIATE

No. 25-84131500-ITN

Questions and Answers

And

Addendum No. 1

Revision to ITN

Questions and Answers

The Department has received the following questions through the Business Network, and the Department’s answers are provided in the table listed below:

No. Question Answer

1. Attachment C, Technical Response:

Section II.2 includes BMS as one of the insurance providers to indicate whether we place business with or not. BMS is an insurance intermediary. Are they listed because the State desires that BMS be the intermediary of choice for this program?

No.

Please see Addendum No. 1, below, and Attachment C, Revised Technical Response.

The Division is inquiring if the Respondent has secured insurance, reinsurance or retained as an intermediary with the companies listed in Attachment C, Technical Response, Section II., Broker of Record (BOR) / Reinsurance Broker Services, Question 2.

2. Please confirm that the following intermediaries must be INCLUDED within the total costs provided in Attachment D:

Fee Schedule / Cost Proposal

a. Retail broker (respondent)

b. Domestic wholesale brokers or intermediaries (whether owned or non-owned)

c. International wholesale brokers or intermediaries (whether owned or non-owned)

Confirmed.

The annual broker fee in Attachment D, Fee Schedule/Cost Proposal, will reflect the total fixed annual amount the Respondent will charge the Division for the broker services and should be inclusive of any wholesale brokers or intermediaries utilized by the Respondent.

3. Please provide the most recent detailed accounting of revenues for all intermediaries (incl Domestic, International, Owned and Non-Owned) involved in the current property insurance placement as detailed in the Scope of Work 4.10 Pricing – Broker Fee.

Please refer Attachment A, Scope of Work, Section 4.10 Pricing – Broker Fee.

There have been no reported revenues or additional commissions collected under the current contract.

4. Over the past 3 years, how many hours of risk control / loss prevention has the State utilized on average per year?

Approximately 3.3 hours on average per year.

5. Can the Division provide a copy of the current schedule of values (SOV) inclusive of COPE data and the primary property policy? (Attachment A, Section 4.1.2)

Please refer to Attachment T, Broker Report for Construction, Occupancy, Protection, Exposure (COPE) data, incorporated as part of Addendum No. 1, below, and Attachment K, Property Certificates for the primary property policy.

6. Can the Division provide the current schedule of values (SOV) for modeling purposes? (Attachment A Section 4.1.1- 4.1.3)

See answer to question #5.

7. Does the Division purchase any NFIP coverage currently? (Attachment A, Section 4.5.1)

No, the Division does not purchase separate National Flood Insurance program (NFIP) coverage. In Attachment K, Property Certificates, please refer to section B., Covered Causes of Loss subsection 9., Flood, and section D., Limits of Coverage.

8. Does advising the Division on claims support include advising on coverage lines unrelated to this procurement (e.g. worker’s compensation or auto) (Attachment A, Section 4.5.3)

Yes.

9. Does the prohibition against the successful broker accepting commissions extend to 3rd parties the broker works with, for example commissions charged by wholesale brokers that provide access to Excess and Surplus Lines markets? (Attachment A, Section 4.10)

The fees paid by the State for all services under the resulting contract are limited to those stated.

Please see Attachment H, Draft Contract, section V. Broker Fee, Taxes, and Travel.

10. Please provide the following by year for the last 10 years.

a. Premium spend

b. total insured value

c. Structural changes to the property insurance program (deductibles, limits purchased, risk retained, etc.)

This service is for the Department of Financial Services (DFS), Division of Risk Management.

Please refer to Attachment U, 10 year Spend and TIV, incorporated as part of Addendum No.

1, below.

11. Current Property schedule included in DMS’ insurance program, Including any data enhancement of underwriting information.

This service is for the Department of Financial Services (DFS), Division of Risk Management.

See answer to question #5.

12. Please provide modeling reports used to determine limit adequacy. Please provide

RMS & AIR.

Modeling reports are deemed proprietary and confidential.

13. Please advise on DMS’ discussions around retaining risk and whether DMS is looking toward increasing or decreasing that risk.

This service is for the Department of Financial Services (DFS), Division of Risk Management.

This will be discussed during negotiations.

14. Please provide at a minimum the primary policies or renewal proposals that provide what sub limits DMS’ program is subjected to.

This service is for the Department of Financial Services (DFS), Division of Risk Management.

Please refer to Attachment K, Property Certificates, Attachment L, SOF Property Quilt, and Attachment V, Excess Policies 2025-2026, incorporated as part of Addendum No. 1, below.

15. Advise what TPA is being used for claims, and who or what process was undertaken to select the TPA.

The current Third-Party Administrator (TPA) is Sedgwick Claims Management Services, Inc.

contracted through an Invitation to Negotiate.

16. What alternatives were assessed in addition to a traditional placement?

This will be discussed during negotiations.

17. Have multi-year capacity options been offered historically?

This question is unclear.

18. Please provide loss detail for the last 10 years.

Please refer to Attachment W, Loss Detail, incorporated as part of Addendum No. 1, below.

19. Please provide historical examples of the tasks completed related to the additional risk management hours built into DMS’ fee request and if possible, provide average amount spent on these types of tasks per year.

This service is for the Department of Financial Services (DFS), Division of Risk Management.

See answer to question #4.

Consulting services vary depending on the needs of each state agency or university and have included, but were not limited to:

• risk assessment preparations

• marketing research for employee liability coverage

• presentations to the Interagency Advisory Council on Loss Prevention

• intern insurance programs

• assessing errors and omission

• active shooter

20. Can you please identify the State agencies that are participating in each line of coverage?

This service is for the Department of Financial Services (DFS), Division of Risk Management.

Please refer to Attachment X, SRMTF Participating Agencies and Universities, incorporated as part of Addendum No. 1, below.

Coverage lines provided by the Division of Risk Management, State Risk Management Trust Fund, are provided to all participants in that fund in accordance with Florida Statutes, Chapter 284.

21. Can you please provide a copy of the current contract.

a. If not included, please disclose commissions and fees paid to all wholesalers or intermediaries utilized for placement, whether owned or not by the incumbent vendor

b. Are there any caps to potential commission and fees to wholesalers or intermediaries?

The contract can be viewed in the Florida Accountability Contract Tracking System (FACTS) at:

https://facts.fldfs.com/Search/ContractDetail.asp x?AgencyId=430000&ContractId=D1011.

Commissions and fees paid to wholesalers or intermediaries is unknown to the Division.

22. Regarding Attachment C-Technical Response, the required document's response boxes allow for very minimal text formatting.

No.

ITN Attachment C, Technical Response, is limited to twenty-five (25) pages, excluding attachments. Only if an attachment is requested by a question, the attachment should be https://facts.fldfs.com/Search/ContractDetail.aspx?AgencyId=430000&ContractId=D1011 https://facts.fldfs.com/Search/ContractDetail.aspx?AgencyId=430000&ContractId=D1011

Is it acceptable to provide an Addendum to Attachment C-Technical Response, providing additional information associated with the responses to the questions in Sections I-IV?

provided in Adobe PDF format. Please see Addendum No. 1, below, and Attachment C, Revised Technical Response.

23. Along with a copy of the full schedule of values, does your program have any significant COPE (construction, occupancy, protection and exposure) data or audit information that you can share?

24. Can you share your most recent catastrophe modeling results (RMS or Verisk/AIR)?

See answer to question #12.

25. Who currently handles loss control for the State?

Each state agency and university handle their own loss control.

26. How are locations valued, annual or rolling appraisals?

Values are self-reported by each state agency and university annually. Some covered agencies and universities periodically have appraisals conducted.

27. What is your purchasing philosophy for

Wind limits, CAT limits and overall limits in general.

This will be discussed during negotiations.

28. Have you explored alternative structures or deductibles for cost savings?

Yes.

This can be discussed during negotiations.

29. Do you have copies of the policy form that you can share?

See answer to question #14.

30. How many certificates do you issue annually?

The Division of Risk Management has issued 334 certificates for the property program for fiscal year 2024-25.

31. How are contract reviews currently handled and how many does the current broker assist?

The contract is reviewed by the Division of Risk Management on an ongoing basis with Contract deliverables reviewed as they are submitted by the Broker.

32. Are we able to get 5 to 10 year loss runs for all policies?

See answer to question #18.

33. How are the current claims process handled? Does the current broker report all their claims to carriers, do they have a

TPA?

Property claims are handled by the Division of Risk Management and the Division’s TPA Sedgwick. Generally, the Broker puts the carriers on notice if a loss is expected to exceed the self-insured retention (SIR). The carrier’s TPA (currently Sedgwick) works closely with the Division’s TPA on specific claims exceeding the

SIR.

Out of state workers’ compensation claims are handled by the carrier.

34. How are claims below the SIR handled? See answer to question #33.

35. How do you currently collect COPE information?

COPE information is input to Division of Risk Management’s property database and managed by each state agency and university on an ongoing basis.

36. How often is modeling done on the portfolio?

Annually.

37. Can you please provide a full schedule of all buildings?

38. How do you handle adds/deletes on your schedule? Is this currently handled on a quarterly basis?

See answer to question #5.

Add / deletes are input to the Division of Risk Management property database by each participating entity as needed. The Division reviews this data before acceptance.

Addendum No. 1

The Department hereby amends ITN No. 25-84131500-ITN as noted within this Addendum. For revisions, highlights and underlines represent additions and strikethroughs represent deletions. In the event of a conflict between previously posted information and the information contained herein, the information herein shall control. The information included in this addendum is hereby made part of this solicitation.

Failure to file a protest within the time prescribed in section 120.57(3), Florida Statutes, or failure to post the bond or other security required by law within the time allowed for filing a bond shall constitute a waiver of proceedings under chapter 120, Florida Statutes. Any protest concerning this agency decision must be timely filed with the Agency Clerk. Protests may be filed by courier, hand delivery, or U.S. mail at Department of Management Services, Office of the General Counsel, Attention: Agency Clerk, 4050 Esplanade Way, Suite 160, Tallahassee, FL 32399-0950. Protests may also be filed by fax at 850-922- 6312 or by email at agencyclerk@dms.fl.gov. It is the filing party’s responsibility to meet all filing deadlines.

The Procurement Officer should be copied in such filings.

Please note: This addendum does not need to be returned with the proposal.

The Department hereby amends ITN No. 25-84131500-ITN as noted within this Addendum.

1. Attachment C, Technical Response is replaced its entirety by Attachment C, Revised Technical

Response. All references to Attachment C, Technical Response contained in ITN No. 25-84131500- ITN are hereby amended to refer to Attachment C, Revised Technical Response. However, Respondent will not be deemed non-responsive for submitting the original Attachment C, Technical Response.

2. The following attachments are hereby added in their entirety:

• Attachment T, Broker Report

• Attachment U, 10-Year Spend and TIV

• Attachment V, Excess Policies, 2025-2026

• Attachment W, Loss Detail

• Attachment X, SRMTF Participating Agencies and Universities

3. Attachment A, Scope of Work, Section 3. Current Program Structure section 3.1, Property Program, has been amended as follows:

3. CURRENT PROGRAM STRUCTURE The current Risk Management Program serves multiple state agencies and universities located across the state. A listing of those covered entities is provided as Attachment X, SRMTF Participating Agencies and Universities.

3.1 Property Program

The property insurance provided to State Agencies and Eligible Users utilizes a manuscript primary policy form, which affords coverage on a named perils basis, with losses paid at actual cash value as opposed to replacement cost. As of February 1, 2025, the State has approximately 21,179 buildings with TIV of $31.3 billion, broken down as follows, with property located in all sixty-seven (67) counties of the State. Attachment T, Broker Report provides the current schedule of values on the program, and is broken down as follows:

Building Values $23.3 billion mailto:agencyclerk@dms.fl.gov

Content Values $7.5 billion

Rental Values $447 million

Excess Insurance is purchased through the existing Broker of Record from several insurance carriers, primarily surplus lines, or non-admitted carriers. Self-insured retentions (SIR) are maintained on a per-occurrence basis, with no per-building or per-location deductibles, except for flood coverage, which has a per-location deductible. For the excess insurance purchased in February 2025, a $2 million per occurrence self-insured retention was maintained for all covered perils, with a $40 million annual aggregate self-insured retention maintained for named windstorm and flood perils. A total of $75.25 million of coverage was purchased for named windstorm and flood perils, and a total of $350 million of coverage was purchased for covered perils other than named windstorm and flood. This coverage was provided by fifteen

(15) insurance carriers. Refer to Attachment V, Excess Policies for the 3/15/2025-2026 program. See also, Attachment U, 10 year Spend and TIV for details on limits, coverage, total insured values and associated premium costs by policy year.

Attachment W, Loss Detail provides the losses reported on the program. Since 2006, only three (3) losses have been paid by excess insurance or reinsurance.

Loss Event Year Event SIR

2014 Tornado - Calhoun Correctional Institute $2 million

Fire - Department of Agriculture Packing

House $2 million

Tornados – Leon County and surrounding areas $2 million

During the fiscal year ended June 30, 2024, the Division paid $19,462,920 in property losses and worked 1,201 claims, with 617 new claims received during the fiscal year. The Division’s Property Certificate of Coverage is included in Attachment K, Property Certificates of Coverage. The current coverage quilt for the Division’s Property Program is included in Attachment L, State of Florida Property Quilt.