Information from Florida Office of Insurance Regulation re Florida’s Hurricane Insurance Market Final Report 3/10/2006
Jan 4, 2007
Please find below a press release issued by the Florida Office of Insurance Regulation regarding the report issued by the Task Force on Long-Term Solutions for Florida’s Hurricane Insurance Market. The press release summarizes the major issues addressed in the final Task Force report. A copy of the Task Force report here, as well as a copy of the House of Representatives Insurance Committee’s Proposed Committee Bill regarding property insurance and a summary of the Proposed Committee Bill here and here.
Should you have any questions or concerns, please feel free to contact this office.
OIR Releases Report from the Task Force on Long-Term Solutions for Florida’s Hurricane Insurance Market
The Task Force on Long-Term Solutions for Florida’s Insurance Market submitted a report to the Governor and Legislature today detailing the devastating effects two hurricane seasons have had on consumers, the strained financial resources of the private market, issues facing Citizens Property Insurance Corporation (Citizens) and the Florida Hurricane Catastrophe Fund (FHCF), and offers numerous recommendations to stabilize Florida’s insurance market.
The suggested solutions recommended by the Task Force can be grouped into five main categories:
* Creating a Federal Backstop by pushing for a long-term national solution to catastrophe insurance and encouraging a discourse to create a National Catastrophe Fund. This fund would not only provide additional capital, but would also be a stabilizing force to the Florida insurance industry.
* Promoting mitigation by improving the resiliency of Florida homes through improved building codes for new homes, retrofitting of older homes, and the adoption of the Building Code Effectiveness Grading System. This recommendation includes grants and subsidized loans.
* Limiting Citizens’ exposure by limiting eligibility to home structures valued under $1 million, the continuation of the seasonal occupancy surcharge, refinement of Citizens’ rate making process, and a review of the Citizens’ take-out program.
* Improving competitive conditions by expanding the Office of Insurance Regulation’s monitoring of market conditions and encouraging capital investment into the market, reducing the frictional cost by streamlining regulatory requirements and removing barriers to competition.
* Strengthening the financial position of FHCF, which includes the creation of a better method for FHCF to address multiple event catastrophes, alteration of the rate structure to more quickly replenish the FHCF’s cash reserves, and consideration of other methods, including the use of sales tax revenue from post-storm recovery to augment FHCF’s financial position.
During last year’s session, the Legislature passed Senate Bill 1486 which created the Task Force and vested it with the responsibility to develop recommendations to improve the availability of homeowners insurance for all Floridians.
The Task Force brought together members with varied expertise including the insurance commissioner, experts on hurricane damage mitigation, and representatives from the insurance, lending, and construction industries and academia. The Task Force analyzed state and national insurance trends, as well as solicited expert testimony.
Click here to view the complete report issued by the Task Force on Long-Term Solutions for Florida’s Hurricane Insurance Market.