State Legislators Join Florida Tax Watch, Florida Chamber in Support of Property Insurance Deregulation
Apr 5, 2010
The potential for financial disaster should a major hurricane strike Florida was among the issues discussed at a press conference this morning, April 3, 2010, to announce the release of a Florida Council for Economic Advisors at Florida Tax Watch report on the State’s financial exposure from its self-insurance programs specifically relating to Citizens Property Insurance Corporation (“Citizens”) and the Florida Hurricane Catastrophe Fund (“FHCF”).
State Senator Nancy Detert, State Representatives Dave Murzin, Bill Proctor, Marty Coley and former State Representative Don Brown joined Florida Tax Watch and Florida Chamber of Commerce representatives at the Tallahassee event.
The report, which was requested by Florida Chief Financial Officer Alex Sink in 2008, concludes that Florida’s property insurance market concentrates risk, rather than spreads it. At the press conference, it was acknowledged that Florida is one major storm away from a crisis unless the federal government were to intervene at that time. Further, the FHCF has a $7.2 billion shortfall.
Among the recommendations made in the report were:
- Require Citizens to return to its former role as Florida’s insurer of last resort
- Require Citizens and the FHCF to issue estimates of potential assessments
- Encourage the mitigation of residential property
Calling Representative Proctor’s bill, HB 447, a “great start,” Representative Murzin explained that ” . . . the public option to manage hurricane risk isn’t working,” and stressed the need to act to correct property insurance issues during the 2010 Legislative Session.
Representative Proctor said that the reliability of insurance companies should be of primary concern in addressing these issues. Inadequate rates could be biggest problem facing Floridians, he added.
Senator Detert echoed Representative Proctor’s comments, including the suggestion that Citizens should be Florida’s insurer of last resort.
In advocating HB 447 as a solution for Florida’s property insurance issues, Representative Coley said that the State needs to be prepared for the next hurricane season.
According to Mr. Brown, the Tax Watch report concludes that property insurance reform in Florida is necessary. In stating his support for consumer choice in selecting a property insurer, he cited his concerns that consumers may not be able to get their claims paid without provisions for adequate rates.
During the discussion, it was noted that it pre-event storm loss financing is less expensive than that of post-event funding.
In response to media member questions, a representative of Florida Tax Watch said that passage of related legislation as a solution to these problems is anticipated. Hope also was expressed that, if it were passed, Florida Governor Charlie Crist ultimately would sign a property insurance deregulation bill allowing for rate adequacy.
The press conference materials and a copy of the Florida Tax Watch report, entitled “Florida’s Financial Exposure from its ‘Self-Insurance’ Programs: The Citizens Property Insurance Corporation and the Florida Hurricane Catastrophe Fund,” are attached for review.
To access other reports by Florida Tax Watch, go to www.floridataxwatch.org.
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