A rapid cash buildup of 25 percent for the Florida Hurricane Catastrophe Fund and the establishment of a hurricane mitigation endowment fund to allow homeowners to obtain no-interest loans to implement hurricane mitigation measures for their homes are two features of House Bill 7225, which was approved April 24 by the House Commerce Council. The Florida legislative session is now in its final two weeks and the bill is expected to be voted on by the full House later this week.
The Property Casualty Insurers Association of America is urging the Florida Legislature to enact legislation (HB 7225) that will significantly improve the state’s homeowners insurance marketplace.
Other provisions of the bill include the adoption of a flex-rating system to allow property insurers to raise or lower rates up to 5 percent statewide and 10 percent per rating territory without approval of the Office of Insurance Regulation. There are also changes to the Citizens Property Insurance Corp. One the provisions would prohibit Citizens from insuring homes insured for $1 million or more.
A key provision in the bill would allow limited apportionment companies to purchase reinsurance from the Florida Hurricane Catastrophe Fund below their current calculated retention for the 2006 season.
“This is particularly important to small insurance companies that are finding it difficult to purchase reinsurance in the private market,” Jeffrey Brewer, PCI’s director of state public affairs said. “Reinsurance prices have spiked and in some cases it is unavailable. This provision is necessary to promote stability in the marketplace by assuring that reinsurance remains available to these companies.”
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