Florida Senate Banking and Insurance Committee Explores State-Run Flood Insurance; Citizens Property Insurance CEO Barry Gilway Reviews Commercial Non-Residential Coverage
Oct 9, 2013
The Florida Senate Committee on Banking and Insurance (“Committee”) met yesterday, October 8, 2013, during which legislators heard presentations from the Florida Office of Insurance Regulation (“OIR”), the Florida Division of Emergency Management and the Florida Realtors Association.
Comments were also provided by representatives from the private insurance market about the National Flood Insurance Program (“NFIP”). Each presenter discussed the current flood insurance situation as exacerbated by the impact of the Biggert-Waters Flood Insurance Reform Act of 2012 and presented possible solutions to address the growing concern of NFIP premium costs in Florida.
In turn, each presenter fielded questions from Committee members about the feasibility of Florida’s opting out of the NFIP and handling the provision of flood insurance coverage on its own. Both the OIR and private market representatives noted that Florida carriers already write flood insurance coverage, and there is an appetite for more capital to enter the state, if the regulatory and statutory hurdles are decreased.
To accomplish this, the private market representative suggested the following:
(1) Make the federal floodplain mapping process transparent
(2) Ask the OIR to report to the Legislature on how Florida laws and regulations could be revised to help attract more flood insurance providers
(3) Create a task force to evaluate opting out of the NFIP
Barry Gilway, President and CEO of Citizens Property Insurance Corporation (“Citizens”), began his presentation to the Committee on Citizens’ commercial non-residential business. He explained the current types and counts of Citizens’ commercial policies, along with their overall risk and premiums. He also addressed rate adequacy or, in the case of commercial non-residential wind-only polices, what he characterized as a huge rate inadequacy that could not be solved by a glide-path approach.
Before Mr. Gilway was able to finish his presentation, the meeting time expired, leaving some questions unanswered, such as whether Citizens should no longer write certain types of policies, and whether Citizens should have more caps on its exposure and risk.
Chairman David Simmons invited Mr. Gilway to return to the next Committee meeting to discuss his recommendations.
To view the meeting packet, click here. Mr. Gilway’s presentation begins on page 81.
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