Florida’s property insurance reform bill has now been passed by the state Senate in a 27 to 13 vote that was along mostly party lines.
Just one Democrat approved the Republican-brought bill, though two Republican senators voted against it.
The proposed bill would create a $1 billion reinsurance fund, reduce litigation costs and may compel some customers to leave state-created insurer Citizens.
Additionally, it aims to eliminate one-way attorney fees for property insurance lawsuits, removing the ability of a homeowner to sign over benefits to a contractor to pursue the claim on their behalf to kick-start repairs.
The bill was passed by the Senate Banking and Insurance Committee unchanged yesterday and is expected to be taken up on the House floor today.
It is important to note that many reinsurance capital providers do not believe this is sufficient to cover the gaps that will be left in Florida property insurers’ towers next year unless more can be done to rebuild the reinsurer appetite for risk in the state.
Further, according to Gallagher Re’s Market Watch report, Florida’s personal property carriers saw their policyholder surplus decline by 23.5% by the end of Q3 2022, while their average combined ratio was very high at 147.5%.
Based on this, far more capital may be required by the sector, meaning a $1 billion layer of emergency reinsurance below the FHCF could prove to be insignificant at the next renewals unless reinsurer and capital market appetites can be rebuilt.
Meanwhile, the Florida Senate also passed Senate Bill 4A, Disaster Relief, by Senator Travis Hutson (R-Palm Coast), which provides relief for Floridians impacted by recent hurricanes; and, Senate Bill 6A, Toll Relief, by Senator Nick DiCeglie (R-St. Petersburg), which provides $500 million in statewide toll savings for Florida commuters.
Senate President Kathleen Passidomo (R-Naples) commented on all the measures debated and passed yesterday, stating, “The legislation we passed today brings meaningful assistance for challenges facing constituents across Florida.
“The toll rebates for frequent commuters and property tax refunds for those whose homes are uninhabitable following recent hurricanes provide swift, tangible relief that will make a difference in the pocketbooks of Florida families.
“We know we can’t rebuild a hurricane-destroyed home or lower homeowners insurance rates overnight, but the reforms passed today lay the groundwork for long-term improvements that will give people a place to live while their homes are being repaired or rebuilt as well as structural, pro-consumer changes to our property insurance market that will stabilize the market to reduce rates over time.”
Senator Boyd, Chair of the Senate Committee on Banking and Insurance, who sponsored Bill SB-2A, added, “With this legislation, we are trying to stabilize a market that is in freefall. Seven carriers have gone insolvent in the past two years, reinsurance is shrinking in the global markets as costs are going up, and Citizens Property Insurance is ballooning once again with more than 1 million policies holders, creating huge liabilities for taxpayers and the threat of assessment for all insurance policyholders. This is an environment that cannot sustain itself.”
“Senate Bill 2A builds on the consumer-friendly reforms we passed in May, working to curb rising rates and bring stability to the market for the benefit of consumers.
“We are striving to help consumers who have paid too much for too long for their insurance coverage so a few bad actors can make millions of dollars on the backs of hardworking Floridians. Forty other states have implemented what we have done here today, with no indication of problems, as over 75% of the litigation nationwide still comes from Florida.
“This is about consumer protection. This is about eliminating abusive lawsuits. This is about increasing opportunities in the market for more carriers to come down here and write policies, driving down costs for consumers.”
