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Friday, February 8, 2013

Draft Legislation in Florida State Senate would Overhaul Property Insurance Market

In an effort to move state risk to the private sector, the Florida state Senate Banking and Insurance Committee has released a draft bill that would make significant changes to the current property insurance market in Florida. Florida operates Citizens Property Insurance Corp., which currently covers nearly 25% of the property insurance market in the state, and the legislation seeks to move much of that market share to the private sector. By increasing competition in the private sector, lawmakers hope to prevent homeowner insurance rates from dramatically increasing.

The changes included in the draft bill:
  • decreasing the Florida Hurricane Catastrophe Fund;
  • providing a means for private property insurance companies to share the risk of individual policies with Citizens;
  • preventing Citizens from insuring buildings that are under construction located in coastal areas;
  • preventing Citizens from writing new policies for homes valued at over $400,000;
  • establishing a clearinghouse to place new Citizens' policies in the private insurance market instead;
  • and increasing the cap on Citizens annual rate increase to 15% from the current 10%. 
A hearing on the legislation is expected to be held in two weeks. 

Learn more.