With the 2010 Atlantic hurricane season officially beginning in less than half a month, on June 1, the Florida-Based Property Insurers CEO Group, which represents 21 different carriers, held a media conference on April 21 to propose sweeping legislation addressing major problems in the state’s property insurance market. Calling on the Florida legislature to support the property insurance market in order to better protect citizens from the impending hurricane season, the group cautioned state lawmakers about the significant changes that are needed in a remarkably short period of time. To avoid these changes, they expressed, may be to burden Floridians with billions of dollars in debt, with major hurricane damage adding astronomical assessments to citizens’ homeowners insurance, hurricane insurance, sinkhole insurance, and property damage insurance.
For the past few years, taxpayers have been fortunate enough to not face considerable financial hardship as a result of widespread property damage, since Florida has not experienced a major hurricane since 2005. Today, taxpayers are still paying for the damage done that year, the most active hurricane season in recorded history, by the most intense hurricane ever recorded in the Atlantic Ocean, Hurricane Wilma, among several others. Now the Florida-Based Property Insurers CEO Group fears that the state’s luck may run out this year, causing taxpayers to indeed face the financial hardship of paying for the damage through assessments added to their insurance premiums.
Legislative Measures to Address the Problem
In response to the group’s conference, Florida lawmakers are proposing measures to strengthen the state’s property insurance market, namely with bills CS/CS/SB 2044 and CS/CS/HB 447. The bills will impose a three-year limit on hurricane insurance claims; address fraudulent activities, particularly by mitigation discount verification inspectors and public adjustors; require that insurance payments go to repairing damage caused to homes by hurricanes or sinkholes; get rid of unnecessary sinkhole insurance claims; and support legislation to ensure the solvency of insurance companies and to protect policyholders by providing the Office of Insurance Regulation with authority to appropriately supervise managing general agencies (MGAs), whose structure has been crucial to the organization of Florida insurance companies since the worst hurricanes have ravaged the state.