Florida Governor Ron DeSantis has signed new legislation into law that seeks to stabilise the troubled property re/insurance market in the state, following a week of discussions by lawmakers at a special emergency session.
The reforms, which include a $2 billion reinsurance fund and new rules on coverage denials and attorney fees, were signed by the Florida Governor after successfully passing the house earlier this week.
They are designed to enact pro-consumer measures that help to alleviate rising insurance costs, increase insurance claim transparency, and crack down on frivolous lawsuits that have driven up prices in recent years.
Specific provisions include $2 billion in reinsurance relief through the Reinsurance to Assist Policy (RAP) program to help policyholders over the next two years.
Other measures $150 million for hurricane retrofitting, as well as rules that require insurers to provide a reasonable explanation for denying coverage, and that prohibit insurers from denying coverage based on factors such as the age of a home’s roof.
Further rules limit the assignment of attorney’s fees in property insurance cases and enforce more stringent structural inspections of properties.
The reforms have been hailed by lawmakers and have generally also received support from the re/insurance industry, but there are still many who feel that the legislation does not go far enough.
There are concerns among re/insurers, for instance, that the reforms may not significantly change the litigation landscape, nor the profitability of Florida property reinsurance business in the short term.
And some commentators have suggested that provisions related to contingency multipliers may now make it much harder for a homeowner to rightfully sue its insurer during a dispute.
Likewise, criticisms levelled at the RAP fund charge that Florida will be shifting its risk away from the private market and back onto taxpayers.
Additionally, opposition politicians in Florida say the changes won’t bring immediate financial relief to homeowners facing huge premiums increases, with even the incumbent Republicans acknowledging that it may take 12 to 18 months before prices drop.
“Florida’s property insurance market is one of the most complex in the world and I commend the leadership of Governor DeSantis, CFO Patronis, and the Florida Legislature for tackling market challenges head on to enact historic and comprehensive insurance reform,” said Florida Insurance Commissioner David Altmaier.
“This legislation strengthens protections for Florida insurance consumers, provides greater tools to hold insurance companies accountable, and promotes the long-term stability of our market.”
“This package represents the most significant reforms to Florida’s homeowners insurance market in a generation,” added Governor Ron DeSantis. “These bills will help stabilize a problematic market, help Floridians harden their homes through the My Safe Florida Home Program, and pave the way for more choices for homeowners.”
State Chief Financial Officer Jimmy Patronis also commented: “I’m grateful that Governor DeSantis called lawmakers to convene this week to pass legislation that will help rein in insurance rates, provide premium savings to Floridians, and aid in hardening homes against storms. I remain committed to fighting insurance fraud and bolstering our investigative services to further support our efforts to protect consumers.”