Florida Governor Ron DeSantis has signed into law bill HB 301, part of which doubles the reimbursement rate insurance companies can receive from the Florida Hurricane Catastrophe Fund (FHCF).
The Florida House of Representatives passed the legislation in April 2019, at the same time as it passed a bill targeting assignment of benefits (AOB) reforms in the state.
At this time, the insurance and reinsurance industry urged the Senate to pass both bills in order to try and fix serious and detrimental issues within the Florida marketplace.
In late May, it was announced that Gov. Ron DeSantis passed into law proposed reforms to assignment of benefits (AOB) practices in the state, and it’s now been revealed that he has also passed bill HB 301 into law, also known as the “Omnibus Prime” insurance bill.
Under the bill, an insurer’s loss reimbursement covered by the FHCF would increase from 5% to 10% for losses on contracts effective after June 1st, 2019. It’s hoped that this could result in lower premiums for consumers and it’s also expected to be beneficial for the insurance market.
Florida Politics reports that Senate bill sponsor Jeff Brandes previously told the publication that “The unfortunate reality is over the last many years, the loss adjustment expenses for some of these storms have been as high as 30 to 40 percent on some of these claims.”
A number of significant hurricanes hit the state of Florida in 2017 and 2018 after more than a decade without a landfalling event impacting the state. Some of the storms experienced significant loss creep and as such loss adjustment expenses were particularly high for some.
The bill also features legislation that looks to increase opportunities to recover legal defence costs by enabling insurers to split fees in certain instances.
“Florida’s insurance market is one of the most dynamic in the country. With the passage of HB301 we continue to work to provide more consumer choice, allow additional flexibility to our existing providers, and address issues across the industry that benefit homeowners and car insurance policyholders,” said Brandes, as reported by Florida Politics.