As Domestic Insurers Multiply, Industry Applauds Florida’s Licensing

Florida’s domestic insurers continue to take on a larger and larger role in the state’s property insurance market.

The latest data from Florida’s Office of Insurance Regulation show the domestic market share nearly doubled to 44 percent between the year 2005 and the end of 2007. When final data for 2008 is compiled in the next few weeks, the domestics’ share could reach the 50 percent mark or even higher.

Florida Insurance Council President Guy Marvin says Florida’s domestic companies are “critically important to bringing long-term stability to a market that has been riddled with instability due to our ever increasing threat from hurricanes.”

Much of the growth in the domestic market share can be attributed to the increase in the number of new, home-grown companies that have started in Florida in the past two years.

More than two-dozen new companies have put together hundreds of millions of dollars of capital and have undergone the state’s screening and licensing process to win approval of the Office of Insurance Regulation that authorizes those companies to write property insurance in Florida.

According to the industry, many of those start-ups took advantage of the Capital Build-Up Incentive Program established by the 2006 Florida Legislature while others have brought in millions of dollars of new investment from areas outside of the state.

Florida Chief Financial Officer Alex Sink has asked Florida Insurance Commissioner Kevin McCarty to prepare a presentation for Jan. 13 before the Cabinet to detail OIR’s evaluation process for new companies it licenses.

The industry said it welcomes the scrutiny of the licensing process.

“The end results of these rigorous examinations should help reassure our customers that the Insurance Commissioner will not allow a company to operate in Florida until its meets his office’s tough standards for financial soundness,” said Marvin.

Source: Florida Insurance Council

Topics Florida Carriers