Following a presentation by Florida Insurance Commissioner Kevin McCarty, Gov. Jeb Bush and the Florida Cabinet approved an emergency rule establishing a property and casualty joint underwriting association to make commercial property insurance available to Florida businesses that are unable to find coverage in either the admitted or surplus lines insurance markets.
Under existing law the state can form an association to help provide commercial property coverage if enough businesses appeal to the state because they cannot access adequate insurance. The Office of Insurance Regulation (Office) has received numerous requests for assistance over the internet, by phone, through emails and in person from those who have had their coverage reduced and/or seen their premiums dramatically increase. The Office has also heard from many businesses that cannot locate coverage at any price.
“I have heard from too many Florida business owners who are facing losing their insurance in the middle of hurricane season,” said McCarty. “If left unchecked, this problem will have a negative affect on our state’s economy, as we have already heard from businesses that may have to move out of Florida.”
The plan approved today makes use of a statute that was put into law in 1986 (F.S. 627.351(5)) to deal with a commercial insurance crisis at that time. It created a Joint Underwriting Association (JUA), which eventually was deactivated, but the enabling statute remains on the books along with the triggering mechanisms which allow it to be reactivated.
The JUA will be run by a 13-member board that will be appointed by the Chief Financial Officer. The plan was drafted to enable the JUA to operate as a reinsurance facility.
The Cabinet voted unanimously to establish the rule for 90 days and to have the Office continue the normal rule-making process dealing with the same issue during that time. A copy of the approved rule is available at www.floir.com/ and click hot topics.
Source: Florida Office of Insurance Regulation
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