Capitol to Courthouse Florida Insurance Week In Review: March 15-19, 2010
Mar 19, 2010
Above: House Bill 447 Sponsor, State Representative Bill Proctor (R-St. Augustine–left), makes a point while huddling with Speaker-pro tempore Ron Reagan (R-Sarasota–center) and Rules & Calendar Chariman Bill Galvano (R-Bradenton right) on the floor of the House of Representatives, March 18, 2010. (House photo by Meredith Geddings)
Demotech Details Quarterly and Annual Review Process, Criteria
To familiarize insurers and interested third parties with its expectations related to the rating of Florida property insurers, Demotech published a discussion document on March 16 that addresses selected components of its quarterly and annual review process and criteria. To access the document, click here.
Florida Ports Investment Act Would Trade Insurance Premium Tax Credits for Cash Investment
Cash investments by insurance companies in Florida’s port infrastructure would be incentivized through insurance premium tax credits under the provisions of House Bill 1169, which passed the Florida House of Representatives’ Economic Development Policy Committee unanimously on March 17.
To view the complete report on HB 1169, click here.
House Insurance, Business and Financial Affairs Policy Committee Report: March 17
As part of its March 17, 2010 agenda, the Florida House of Representatives Insurance, Business and Financial Affairs Policy Committee (“Committee”) considered House Bill 447 by State Representative Bill Proctor. As originally filed, HB 447 related to insurance rate deregulation and commonly has been referred to as the “consumer choice” bill.
To view the complete Report, click here.
Senate Committee on Banking and Insurance
The Senate Committee also approved SB 2264 relating to public adjusters after adopting a strike-everything amendment to the bill that was considered to contain concessions from both the insurance and public adjuster industries.
To view the complete report, click here.
Florida Hurricane Catastrophe Fund Approves 2010 Premium Formula for Development and Final Adoption
The Florida Hurricane Catastrophe Fund (“FHCF”) Advisory Council held a regularly scheduled meeting on March 18, 2010, during which it reviewed the 2010 FHCF Reimbursement Premium Formula. To view the agenda and related materials, which include the 2010 Ratemaking Formula Report, click here.
To view a summary of the meeting, click here.
Looking Ahead: March 22-26
Florida Insurance Commissioner to Report on Residential Insurers’ 2009 Surplus and Underwriting Results
At the request of Florida Chief Financial Officer Alex Sink, Florida Insurance Commissioner Kevin McCarty is scheduled to report on the status of the State’s property insurance market at the March 23 meeting of the Florida Cabinet. To preview his presentation, click here (begins on page 11).
To access the Cabinet meeting agenda, which includes a list of insurance-related Florida Department of Revenue Rules scheduled for final adoption, click here.
Florida Hurricane Catastrophe Fund Contract Year Bill on House Special Order Calendar for March 23
CS/SB 1460, which provides a remedy for the FHCF Contract Year glitch, has been placed on the Florida House of Representatives’ Special Order Calendar to be heard on Tuesday, March 23 after being passed unanimously (38-0) by the Florida Senate on March 3. The FHCF Contract Year, which, after being legislatively curtailed in 2009, has created unintended consequences for insurers due to the way in which the cost of reinsurance is amortized on their financial statements.
Without passage of either SB 1460, or its companion, HB 949, an insurer’s 2010 financial statement will show a larger-than-normal expense associated with the purchase of FHCF reinsurance. Specifically, the statement will show an expense equal to five months of FHCF reinsurance costs from January 1, 2010 to May 31, 2010. The statement also will show an expense equal to 12 months of FHCF reinsurance costs over the seven-month period from June 1, 2010 to December 31, 2010, which will result in a reduction of an insurer’s pre-tax income and surplus by more than what it is historically reduced each year for the purchase of FHCF reinsurance. This reduction could impact the financial solvency of some insurance companies, as well as negatively impact their rating from rating agencies.
To remedy the negative financial impact of the transitional FHCF contract year, the both HB 949 and SB 1460 would return the FHCF contract year to June 1 through May 31 beginning June 1, 2010. To view the February 16 Committee on Banking and Insurance analysis of CS/SB 1460, click here.
Florida Insurance Headlines: March 15-19
A proposal to allow property-insurance companies to raise homeowners rates without regulatory approval passed a first House committee Wednesday and was amended to include much of an insurance industry wish list.
Florida’s government-owned Citizens Property Insurance Corp., bracing for an ”above-normal” hurricane season, plans to sell $2 billion in tax-exempt bonds as early as this week.
Today, nearly half of Florida’s home insurance is provided by companies whose primary profit comes not from insuring homes but from diverting premiums into a host of side ventures.
In response to “How insurers make millions on the side:”
The unfortunate truth is that during the past several years, government has passed laws and pursued a regulatory environment that has pushed the property insurance market to the breaking point.
Southern Oak is pleased to announce the quick resolution of concerns expressed by the Florida Office of Insurance Regulation in its March 9, 2010 Order.
A Clearwater-based property insurance company is the latest Florida company to run afoul of Florida insurance regulators.
Insurance Commissioner Kevin McCarty ordered Homeowners Choice Property & Casualty Insurance Company to pay a $10,000 fine within 30 days for violating Florida’s insurance regulations and come into compliance with the state’s rules or face losing its license.
Last week Florida asked for federal financial assistance for thousands of homeowners with property damage caused by defective Chinese drywall.
State Rep. Alan Hays on Wednesday called for the Legislature to investigate property insurance companies in Florida, noting the millions executives made in bonuses and other perks as the companies threatened to leave Florida and begged the state for higher rates to make them profitable.
Sen. JD Alexander , R-Lake Wales, said that he no longer thinks that Florida’s insurance commissioner should be an appointed official.
Hurricane Andrew, for all of the grief it delivered, gave wholesale broker Hull & Co. and Bruce Bowers a big opportunity.
Should you have any comments or questions, please contact Colodny Fass.
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