A key Florida Senate committee introduced a bill this week that would allow surplus line carriers to take over second home coverage from the Citizens Property Insurance Corporation. Reaction from agents and brokers was mixed.
The problem of having government-backed insurance companies provide so-called vacation home coverage, often at rates below what the licensed market can offer, has arisen repeatedly in recent years as national insurance policies and exposure have increased. There is. A 2022 effort to end coverage was defeated by the committee.
This year, Senate Banking and Insurance Committee Chairman Jim Boyd (R-Bradenton) revived a plan to allow surplus airlines as a way to help the nation’s depopulation. Kristin Ashburn of the civic group told the committee Monday that the carrier currently insures between 45,000 and 60,000 secondary homes.
Senate Bill 1716, as amended in committee on Monday, would allow surplus insurers to make takeout offers as long as the insurer’s financial strength rating is “A” or higher, as determined by financial rating agency AM Best. ing. Insurers should also use a Florida-based surplus insurance broker. The takeout plans and prices must then be approved by the Florida Department of Insurance Regulation.
The Florida Association of Insurance Agents supports this bill as a way to support the nation’s population reduction plan and because it will help ensure Florida insurance agents are kept in the process, the association’s government said. said Director BG Murphy.
However, some Florida insurance brokers say allowing surplus insurance to enter the primary market means that premiums may quadruple in some cases and many homeowners face significantly lower coverage limits. and condominium associations say it may not be enough to solve the affordability crisis. Mike Clarkson, managing director of Hilb Group in Florida, an insurance broker for hundreds of condominium associations, said second-homers who joined a redundant carrier may try to return to Citizen at next year’s renewal. suggested it was high. He is also concerned that surplus allowances are not as tightly regulated as licensed insurance companies.
State Sen. Bobby Powell, a West Palm Beach Democrat, also pointed out that in the event of bankruptcy, a surplus insurance company’s claims would not be blocked by the Florida Insurance Guaranty Corporation.
Mr. Boyd, the insurance agency owner, said at the committee hearing that many profitable companies tend to have higher surplus levels than primary carriers, meaning they are less likely to go bankrupt.
However, a recent bulletin from AM Best suggests that redundant carriers may face financial headwinds. On December 20, the rating agency downgraded James River Group’s outlook from “stable” to “negative,” but left its financial strength rating unchanged at “A-.” James River includes James River Insurance Company, a specialty surplus carrier with operations in all 50 states.
Condominiums in Florida say they can’t receive compensation.The bill would allow the public to intervene.
The commission also approved SB966, which would require most home warranties provided by home builders to be automatically transferred to the next homebuyer while the warranty is in effect.
Senate Bill 988 would exempt information about homes collected as part of the state’s “My Safe Florida Homes” wind mitigation subsidy and inspection program from Florida’s expansive open records laws. The committee passed the bill on a 9-0 vote, with proponents noting it would help protect private information about homes, including photos, from falling into the hands of “unscrupulous individuals.”
SB 1622 was requested by Florida OIR. If signed into law, insurance companies, including mutuals, would be required to file supplemental financial reports monthly rather than quarterly and break down data by ZIP code. The bill would also require that while a state of emergency is declared, real estate insurance companies may cancel or not renew homeowners or condominium insurance on wind-damaged properties for at least 90 days after the building is repaired. It will codify what cannot be done. The bill would shorten the period if the policyholder fails to pay premiums, makes material misrepresentations of fact in a claim, or causes delays in repairs. Are listed.
This measure also removes the current requirement for property and casualty insurers to use a weighted model or an average of two or more hurricane loss models. The bill’s sponsor, Sen. Jay Trumbull (R-Panama City), said the changes are necessary to prevent insurance companies from choosing the two models with the highest predicted losses, and that property owners’ fees and insurance premiums.
“My goal and intention was to avoid the two more expensive models and focus on the less expensive model,” Trumbull said at the conference. The Senate staff analysis can be found here.
SB 1622 would also eliminate the current requirement that state public housing authority self-insurance funds limit losses to $350,000 per occurrence.
“We have 24 housing authorities in the state. This allows them to write actuarially defined premiums instead of billing HUD (U.S. Department of Housing and Urban Development) for the excess.” Mr. Trumbull said.
The bill will now move to the Second Senate Committee.
Photo above: Sen. Bobby Powell before a Senate committee (Florida Channel)
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