A rapid 25 percent cash buildup for the Florida Hurricane Catastrophe Fund and the establishment of a hurricane mitigation endowment fund to allow homeowners to obtain no-interest loans to implement hurricane mitigation measures are two features of House Bill 7225, which was approved April 24 by the House Commerce Council.
With the Florida legislative session in its final weeks, the bill was expected to be voted on by the full House by the first week of May.
The Property Casualty Insurers Association of America urged the Legislature to enact the legislation, arguing it would “significantly improve” the state’s homeowners insurance marketplace.
The bill also calls for a flex-rating system to allow property insurers to raise or lower rates up to 5 percent statewide and 10 percent per rating territory without approval of the Office of Insurance Regulation.
The measure also proposes changes to Citizens Property Insurance Corp., one of which would prohibit Citizens from insuring homes insured for $1 million or more.
A key provision in the bill would allow limited apportionment companies to purchase reinsurance from the Florida Hurricane Catastrophe Fund below their current calculated retention for the 2006 season.
“This is particularly important to small insurance companies that are finding it difficult to purchase reinsurance in the private market,” according to the industry’s Jeffrey Brewer, PCI director of state public affairs said.
“Reinsurance prices have spiked and in some cases it is unavailable. This provision is necessary to promote stability in the marketplace by assuring that reinsurance remains available to these companies.”
Topics Florida Reinsurance Property Hurricane
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