The Florida Legislature is considering a bill that could make the state a center for international insurance, much as it already is for international banking.
The House Insurance Committee unanimously passed the measure Feb. 22. The Senate banking and insurance panel is slated to take it up today.
The bill would ease the rules to sell offshore insurance products from Florida to non-U.S. residents. Today, foreign companies sell those products to non-U.S. residents from places outside Florida, such as Bermuda or the Cayman Islands.
But the companies don’t operate in the state, because requirements to set up are too cumbersome for the limited range of offshore products they could sell, proponents of the bill told the South Florida Sun-Sentinel.
Much is at stake for Florida in pursuing the new business that does not compete with domestic insurance — potential investment, jobs, spinoff businesses and a foot in the door of an industry that produces more than $40 billion in insurance premiums yearly in Latin America alone, advocates of the legislation said.
“This is one of the primary priorities for us this legislative season,” said Dana Fernety, vice president at The Beacon Council, Miami-Dade County’s economic development group. “It could be a major job generator and make a real economic impact in years to come.”
A study for the Beacon Council estimates the international insurance industry could produce an economic impact of about $2.7 billion a year in Florida, if 1 million policies were sold yearly and processing done in the state.
That’s nearly as much as the impact from the international banking industry that caters mainly to affluent clients from Latin America. That industry grew out of similar Florida legislation in 1978 that eased rules for international banks serving non-U.S. residents.
A 2000 study for the Miami-based Florida International Bankers Association found international banking generated more than 5,000 jobs and more than $3 billion in yearly impact in the state.
The proposed insurance bill would waive the requirement for foreign insurers selling offshore life insurance and annuities to non-U.S. residents to obtain a Florida certificate of authority, provided the companies met other state requirements. Florida regulators would oversee the business.
To set up in Florida, the foreign insurer would have to show financial statements; a rating by an insurance rating agency; be licensed elsewhere for at least three years and maintain a $15 million surplus; among other requirements.
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