‘Significant’ Fla. reform bill could be national model, says PIA chief

Elements of a property insurance reform bill signed into law May 16 by Florida Governor Jeb Bush could be included and effective in national legislation, according to Len Brevik, executive vice president and CEO of the National Association of Professional Insurance Agents.

Brevik moderated a May 12 PIA of Florida panel during a member summit in Orlando, consisting of leading Florida insurance executives and state officials.

“This is the most significant, comprehensive property insurance legislation that has been enacted since Hurricane Andrew,” Brevik said. “It helps insurer solvency and loss mitigation while at the same time strengthening consumer protections. This is precisely the kind of innovation that will be needed as Congress crafts national legislation.”

The Florida legislation includes: implementation of a flex-rating system to allow insurers to adjust rates 5 percent statewide and 10 percent within a specific region; a provision allowing small insurers to buy reinsurance from the Florida Hurricane Catastrophe fund, along with a $250 million surplus loan program with insurers eligible for up to $25 million if they raise private matching capital; 50 percent matching grants to homeowners for retrofits; free inspections to determine what loss prevention measures are needed to reduce vulnerability of hurricane damage; and an increase in the limit of a claim covered by the Florida Insurance Guarantee Association from $300,000 to $500,000.

After 2008, the bill eliminates homeowners coverage for homes valued at more than $1 million from the state homeowners insurer of last resort, Citizens Property Insurance Corp. In limited circumstances, homes valued at more than $1 million could continue to be insured if the homeowner demonstrates that no admitted carrier would offer coverage and that at least three surplus lines carriers had rejected coverage. In addition, the bill bans public adjusters from participating in the repair of damaged property that they adjust.

In September 2005, the PIA National Board of Directors reaffirmed support for federal legislation. Ray Peretti, PIA National president, appointed a special task force to examine the various pending proposals and make recommendations to Congress. Robert Page, PIA vice president and treasurer, of Houma, La., is chairman of the task force.

“PIA believes the time has come for Congress to adopt and fund a coordinated natural disaster catastrophe program on the national level, a public-private collaborative effort that includes prorated participation by states and local governments, together with the all sectors of the financial services industry,” Brevik said. “Providing such a backstop for natural catastrophes will benefit both consumers who are victims of storms, and insurance carriers suddenly overwhelmed by an onslaught of extraordinary storm-related claims.”

Topics Florida Carriers Legislation Homeowners