A Florida House bill designed to address issues related to insurer insolvency was reported favorably this week from the full House Insurance Committee.
“H.B. 1687 was developed by the Department of Financial Services specifically in response to the fallout from the $140 million Aries insolvency,” said William Stander, regional manager for the Property Casualty Insurers Association of America (PCI). “If enacted, it should help reduce pressure on the Florida guaranty funds while protecting insurance consumers from problems arising from insolvencies.”
Among other provisions, the bill:
· Entitles the estates of injured insurers to actual damages;
· Authorizes a receivership court to impose additional sanctions, and subjects certain managing general agents or holding companies to court jurisdiction under certain circumstances;
· Prohibits a reinsurer from using an order of conservation, rehabilitation, or liquidation as grounds for retroactively revoking or canceling coverage;
· Specifies a replacement arbitration provision for reinsurance agreements;
· Voids any transfer of or lien upon property made during a specified time frame prior to commencement of a delinquency proceeding, if such transaction inures to the benefit of various affiliated entities;
“The insurance industry is pleased to work with the Department’s Division of Rehabilitation and Liquidation as partners in crafting a bill that will protect consumers, confront fraud, and preserve assets,” added Stander.
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