Legislation intended to clarify the regulation of the surplus lines insurance industry in Florida has reached the desk of Gov. Charlie Crist.
Crist has until June 16 to sign the bill (HB 853), which the industry hopes and expects he will do.
But the Florida Surplus Lines Association isn’t taking anything for granted and is urging its members to participate in a letter writing campaign to Crist in support of the measure.
The legislation would remove an ambiguity caused by two Florida Supreme Court rulings last year that suggested that surplus lines insurers are subject to state regulations that never before applied to them. If the court decisions stand, surplus lines insurers could be required to get state approval for their policies in Florida, something that would alter the nature of their business enough that some in the industry fear carriers could leave the state rather than comply.
The industry, a market of last resort and high risk insurance, enjoys relative freedom from rate and form regulation in all states.
Under the legislation that officially passed on May 1, the industry’s regulatory exemption would be restored in Florida retroactive to surplus insurance business written on or after Oct. 1, 1988.
Surplus lines insurance broker Steven Finver, who is FSLA president, told his association’s members in an email that while he is “very confident” that Crist will sign the bill, the industry “must not sit still and just assume this will happen.”
Florida ranks as the fourth largest state in terms of surplus lines business, behind only California, Texas and New York. In 2008, it generated more than $4 billion in surplus lines premium, according to the Florida Surplus Lines Service Office.
This industry handles more than 700,000 excess and surplus lines policies a year; about 40 percent of them personal lines contracts for homes, condos, mobile homes and boats. The rest cover commercial entities, big and small, that could not obtain insurance they need in the standard markets.