The convening of the Florida Legislature this week will present an opportunity for legislators to reconsider some of the problematic measures passed in 2007, according to the American Insurance Association.
“From a public policy standpoint, there was very little good news for the private insurance market during 2007,” said Cecil Pearce, AIA vice president, southeast region. “Although legislators did provide rate relief, it came at a high cost: imposing on policyholders a hurricane tax totaling potentially billions of dollars that must be paid in the event of a major storm. We hope that legislators will rethink that policy, and instead look to long term, market-based solutions that encourage additional private capital to enter the state’s property insurance market, instead of putting a fence around Florida and relying on the government and taxpayers to fund hurricane losses after the fact.”
To that end, AIA is supporting Chief Financial Officer Alex Sink’s measure to reduce the amount of state reinsurance catastrophe fund coverage from $28 to $25 billion, and with it the amount of money the Cat Fund would have to raise through the issuance of bonds and subsequent assessments on policyholders.
The bill has already won unanimous support in the House Jobs and Entrepreneurship Council, and is expected to move to the House floor early in the legislative session.
AIA will also urge that legislators begin the process of returning Citizens Property Insurance Corp. to a true insurer of last resort, reversing the course taken last year that allowed Citizens to more directly compete with the private market. Removing commercial and auto policies from Citizens’ assessment base will also be a top priority.
Although property insurance issues are expected to dominate, AIA will also push for legislation to renew the public records exemption for insurers’ use of credit scoring models. The current exemption expires this year.
AIA will also fight any attempt to weaken or repeal any of the legal reforms enacted in 2006, most specifically the repeal of joint and several liability. Florida’s civil justice environment continues to pose challenges for insurers, and AIA will oppose any measures that attempt to make the state more litigation-friendly.
Source: American Insurance Association
Topics Florida Carriers Legislation Property
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