95-21644 Reso RESOLUTION NO. 95-21644
A RESOLUTION OF THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH,
FLORIDA, AMENDING RESOLUTION NO. 93-20877,
WHICH PROHIBITS THE CITY OF MIAMI BEACH
FROM TRANSACTING BUSINESS WITH ANY
INSURANCE COMPANY,ITS SUBSIDIARY,PARENT,
PARENT'S SUBSIDIARY, AND OTHER ENTITY
RELATED TO INSURANCE COMPANIES WHICH
CANCELS OR FAILS TO RENEW ANY PERSONAL
OR COMMERCIAL LINES PROPERTY INSURANCE
POLICY IN THE CITY OF MIAMI BEACH ON THE
BASIS OF RISK OF HURRICANE CLAIMS AND/OR
CLAIMS ARISING AS A CONSEQUENCE OF
HURRICANE ANDREW; SAID AMENDMENT
ALLOWING A WAIVER OF THE REQUIREMENTS
OF THE RESOLUTION,IF SUCH WAIVER IS FOUND
TO BE IN THE BEST INTEREST OF THE CITY.
WHEREAS, on September 8, 1993,the Mayor and City Commission adopted Resolution
No. 93-20877 (City's Resolution) which, in part, prohibited the City of Miami Beach from
transacting business with any insurance company,its subsidiary,parent,parent's subsidiary,and any
other entity related to an insurance company which cancelled or failed to renew any personal or
commercial lines property insurance policy in the City of Miami Beach on the basis of risk of
hurricane claims and/or claims arising as a consequence of Hurricane Andrew; and
WHEREAS, at the time of the adoption of the City's Resolution, the Board of County
Commissioners of Dade County, on June 17, 1993, adopted a similar resolution (the County's
Resolution), which prohibited Metropolitan Dade County from transacting business with any
insurance company, its subsidiary, parent, parent's subsidiary, and any other entity related to an
insurance company which cancelled or failed to renew any personal or commercial lines property
insurance policy in Dade County on the basis of risk of hurricane claims and/or claims arising as a
consequence of Hurricane Andrew; and
WHEREAS, in the adoption of both the City's and County's Resolutions, in the aftermath
of Hurricane Andrew,it was the intent of both of these legislative bodies to send out a clear message
to the residents of Miami Beach and Dade County, respectively,that no homeowner who suffered
a loss as a result of Hurricane Andrew,would be left with the possibility of facing another hurricane
without the prospect of any future home insurance coverage, and that any arbitrary behavior on the
part of insurance companies who cancelled homeowners policies solely as a consequence of
Hurricane Andrew or the risk of hurricane claims,without leaving them with alternate avenues of
coverage, would not be tolerated; and
WHEREAS, since the passage of both the City's and County's Resolutions, significant
affirmative steps by the State of Florida including, but not limited to, the creation of the Joint
Underwriting Association(JUA),created in the aftermath of Hurricane Andrew and now covering
more than 700,000 home owners,making it the State's third largest insurer of homes, as well as the
recent passage of House Bill No. 26-19, which offers private insurance companies financial
incentives for taking people out of the JUA and is also aimed at strengthening a State Catastrophic
Fund created after Hurricane Andrew, have made the threat of homeowners being left to face
another hurricane without any home insurance coverage, a more remote one; and
WHEREAS,as currently written, the City's Resolution is still a blanket prohibition which
prevents the City from transacting business with virtually any entity, however remote or tenuous
the relationship,which is associated with an insurance company that cancelled or failed to renew any
personal or commercial lines policy as a result of Hurricane Andrew and allows no room for the
exercise of good faith, case by case, discretion on the part of the Mayor and City Commission,
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particularly in situations where a substantial benefit may be conferred upon the City by allowing a
waiver of the requirements of the City's Resolution; and
WHEREAS, Dade County recently confronted this same dilemma when, in May 1995, it
overturned the County's Resolution, waiving the post hurricane rule to allow the County to do
business with an investment firm which it added to its list of bond underwriters, as the subject firm
was owned by an insurance company which had cancelled homeowner policies after Hurricane
Andrew; and
WHEREAS,after revisiting the language in the City's Resolution,the Administration and
City Attorney's Office would herein jointly recommend that the Mayor and City Commission adopt
an amendment to the City's Resolution which would effectively allow the Mayor and City
Commission to consider good faith waivers of the prohibitions established within the City's
Resolution, on a case by case basis, particularly in instances where a potential contractor with the
City may be conferring a substantial benefit upon the City and, in turn, upon the residents of the
City of Miami Beach; and
WHEREAS, as the proposed amendment would allow the Mayor and City Commission
the discretion to either to grant or disallow a waiver of the City's Resolution,on a case by case basis,
the prohibitions originally established by the City's Resolution would still be maintained as a clear
and good faith policy of this City's stance on any future arbitrary and capricious behavior by
insurance companies against the residents of the City of Miami Beach, in the wake of Hurricane
Andrew or of any future hurricanes.
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NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH,FLORIDA,that Resolution No. 93-20877
(the City's Resolution)be amended as follows,with the insertion of the following sentence at the end
of the Resolution:
Notwithstanding the above.the provisions of this resolution may be waived by the
Commission, if such waiver is found to be in the best interest of the City.
PASSED and ADOPTED this 12th day of July , 1995.
ATTEST:
MAYOR
)-c:4 "fl� FORM APPROVED
ERK L GAL DEPT.
A:INSUR.RES By / i. d i/�
LL
Date 4 / Y ? 11
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CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
COMMISSION MEMORANDUM NO. So- 9.5
TO: Mayor Seymour Gelber and DATE: July 12, 1995
Members of the City Commission
FROM: Jose Garcia-Pedrosa P /
City Manager
Murray Dubbin
City Attorney
SUBJECT: PROPOSED AMENDMENT TO RESOLUTION NO. 93-20877 RELATIVE TO INSURANCE
COMPANIES CANCELLING OR FAILING TO RENEW INSURANCE POLICIES IN THE CITY OF
MIAMI BEACH ON THE BASIS OF RISK OF HURRICANE CLAIMS AND/OR ARISING AS A
CONSEQUENCE OF HURRICANE ANDREW
Attached is a detailed analysis of Resolution No. 93-20877 relative to insurance companies cancelling or
failing to renew insurance policies in the city of Miami Beach on the basis of risk of hurricane claims and/or
arising as a consequence of Hurricane Andrew. The analysis finds that Prudential is in compliance with
the terms of the Resolution and also suggests language to amend the Resolution should it be in the best
interest of the City of Miami Beach to do so. A resolution setting forth the proposed amendment is also
enclosed for Consideration by the Mayor and City Commission.
BACKGROUND
On September 8, 1993, the Mayor and City Commission adopted Resolution 93-20877 relating to insurance
companies which cancels or fails to renew property insurance policies in the City of Miami Beach on the basis
of risk of hurricane claims and/or claims arising as a consequence of Hurricane Andrew.
On February 1, 1995, the Mayor and City Commission considered awarding the dental insurance contract
for employees/retirees; among the bidders, is the recommended company of Prudential. (Note:At that time,
questions relative to the applicability of the Resolution to Prudential were unanswered) At that meeting,
the contract was awarded to the incumbent carrier(Prudential) on a month-to-month basis, until September
30, 1995, so as to provide enough time to fully analyze the impact of Resolution No. 93-20877.
In conjunction with this issue,the City Attorney's Office has prepared the attached legal opinion with regard
to the impact of Resolution 93-20877, not only as relating to Prudential but also as to existing and future
transactions with contractors doing (or wishing to do) business with the City of Miami Beach. As the
attached legal opinion also recommends an amendment to Resolution 93-20877, a resolution setting forth
same is also included for consideration by the Mayor and City Commission.
PFL:me
AGENDA Q,
ITEM
DATE ! —I 2-9C