Florida Insurance Bill

Florida just passed an insurance bill to hopefully tame rising rates and insurers leaving the state.
What impact do you think the bill will have if any?


Far better results than when the OIR just denied private insurers rate increases.

I like the attempt at addressing things through a reinsurance perspective; but the long-term problem is going to be how well that program remains funded . . . especially over a stretch of years with little insurance damage from named storms.

But I do find the following statement laughable:

While I think the legislation will keep more companies from leaving the state, there’s a reason that many of those companies are leaving . . . and it’s not because of competition.

The following statement also demonstrates how many lawmakers really don’t understand the problem property owners face:

Many companies are leaving because they recognize that their rates are very inadequate . . . and there’s very little means for them to get to a level of rate adequacy–which the reinsurance portion of the bill addresses. Fortunately, this amendment was voted down; its immediate consequence would be to have even more companies leave or freeze writing new business (which would be needed to absorb policyholders losing coverage because their current company either went insolvent or is leaving the state).

The last thing you want to have happen is for the insurer-of-last-resort (Citizens) to end up being the market share leader . . . as its insolvency will impact every other company for quite some time.

I feel like this ties into the first part you quoted that they (FL politicians) want to bring more competition that will eventually lower rates. The problem seems to be that rates are too low, not the other way around and unless IMO, they either allow carriers to raise their rate to adequate levels or they pass legislation limiting the cost of claims insurers will still think twice about writing FL business.

My preference is to run screaming away from any product that requires seeking approval for rates in Florida.

I’m glad that the Florida legislature has acknowledged that they have a problem beyond simple cat exposure. (The III summarized the non-cat problem better than I can: Triple-I: Extreme Fraud and Litigation Causing Florida’s Homeowners Insurance Market’s Demise | III).

I’m not in the loop enough with Florida personal lines or the new law to have an informed opinion on how much it’ll help. If I were a gambler, I’d probably bet on it bending the curve – probably keeping the existing problems from getting worse, but having only a limited potential of improving matters due to the nature of inertia.

I wouldn’t be surprised if there are a few new Florida-specific writers that form, given the potential for taking some risks out of Citizens’ for rates 20% higher than Citizens’ and the state assistance with reinsurance…but Florida-specific writers seem to come and go, and I’m not certain this would help incent many national writers to grow their Florida books.

Requiring Citizens customers to buy NFIP coverage is probably not a bad idea given this year’s cat experience (and the failure of other mechanisms to get flood-exposed property owners to get coverage), but that’s not going to help with the perceived affordability of homeowners coverage in the state.