Legislators


As Florida seeks to revive its private home insurance market after almost a decade without a hurricane, homeowners are pouring $6 billion a year in premiums into a new generation of small, in-state insurance companies with an unproven record of withstanding a major hurricane.

A consumer-oriented rating agency, Weiss Ratings, recently awarded the companies a median grade of C-minus, and even without a major storm to drive up claims, 11 of them have already failed in Florida since 2006, according to state records.

“This is an accident waiting to happen,” said Gavin Magor, senior financial analyst with Weiss, a national agency with a reputation for tough ratings based in Jupiter, Florida.

Responding to the Weiss ratings, Robert Hartwig, president of the Insurance Information Institute, a trade association, said all the companies meet state regulations, noting that other rating agencies gave higher grades.

“Things are moving in the right direction for Florida in attracting private capital. The risk has been diversified and there’s clearly an appetite for this new risk,” said Hartwig.

Almost 80 per cent of Florida’s insured residential and commercial property, valued at about $3 trillion, lies in coastal areas vulnerable to both wind damage and flooding, according to risk modeling experts.

State officials have encouraged the growth of the private market in recent years, seeking to downsize the overloaded state-run Citizens Property Insurance Co., which ballooned as it took on policies after the major companies withdrew.

The major insurers have stayed away from Florida, saying state regulators require rates that are too low to make the risk of doing business profitable.

Citizens remains the single largest carrier in the state, with 14.5 percent market share.

I think we all know that what we have here in Florida is not what we want, but it is all we have. Citizens is not a great place to be and the Private market provides better policies and coverage so we need these new smaller carriers. We need them because the big carriers like State Farm, All State, GEICO, Progressive, Traveler’s, Liberty Mutual, Nationwide and even USAA have all stopped writing new business here in Florida. I think the real question is why is this being allowed when they write business in other states? They should be told to write all lines of business at some price or leave the state!!! No one is willing to tell them this and stand up to them so this is what we have left to deal with. Lawmakers in Tallahassee do not want to do things that make waves because this will not get them re-elected!!!
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http://www.insurancejournal.com/news/southeast/2014/09/11/340172.htm

The Flood Agency, which offers private flood coverage that are backed by the surplus lines insurer Lloyd’s Private Flood, announced the move some nine months after it began offering the coverage.

The Gainesville-based agency’s decision affects Pinellas, Hillsborough, Pasco, Sarasota and Manatee counties. Flood Agency President Evan Hecht told reporters the decision to stop providing new policies in those areas are based on the need to balance Lloyd’s exposure.

“We currently insure more than $250 million of property value,” said Hecht. “Too much of that is in those five counties.”

The Gainesville-based agency, which provides coverage in 24 states, started offering the policies last fall in response to the Biggert-Waters Flood Insurance Reform Act of 2012.

At the time, the agency-marketed policies were considered a marked relief from the National Flood Insurance Program, whose policies were due to greatly increase. Additionally, the NFIP was scheduled to end subsidies on homes built before 1974, a move that would effect some 268,000 Florida residents.

The U.S. Congress later approved Biggert-Waters 2013 capping many rate increases while reinstating subsidies. That has slowed the demand for private policies, but state lawmakers and others still believe a private flood market could in time become a viable option to the NFIP.

Holehouse Insurance Agency Vice President Jake Holehouse said the current need for private flood coverage is among secondary homes, rentals and commercial coverage that are still bearing the brunt of NFIP rate increases.

Holehouse said the Flood Agency should be commended for providing private flood insurance at a crucial time. He also said he is optimistic that more private insurers will eventually enter the market.

“They are going to be selective and manage their capacity and exposure,” said Holehouse. “There is also going to be more risk-based rating with more and more emphasis being on properties’ elevation.”

Please call L & S Insurance at 1-888-244-7400 for quotes on Home, Flood, Auto, Business & Commercial, & Life & Financial products as well. Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2014/08/25/338470.htm

The recent legislative session in Tallahassee was relatively quiet, a matter some attribute to this being an election year. But even in quiet years, Florida lawmakers tend to make some noise about the insurance industry and this year was no different.

When insurance is a topic among Florida lawmakers, the surplus lines industry is typically brought into the discussions, more so than in other states.

Douglas Mang, of the law firm Mang & Santurri, P.A., who serves as general counsel for the Florida Surplus Lines Association, says there is a good reason for this. The legislature deals with difficult insurance issues and the surplus lines industry specializes in answering difficult questions.

“When there is a need, then it’s the surplus lines industry that fills that void. They have in many, many instances, at least during the time that I’ve been involved with it,” Mang toldInsurance Journal. “So they should be in the mix, if for no better reason than that’s their whole purpose, to provide a market for the hard‑to‑place risk. When those issues arise, that’s where they ought to be.”

Some of what Florida lawmakers did this session could create opportunities for the surplus lines industry, whereas in other cases, their actions frustrated opportunities for the surplus lines industry.

Lawmakers agreed to make changes to laws governing insurance agent and surplus lines licensing (HB633), private flood insurance (SB542), a homeowners’ bill of rights (SB708) and, of course, Citizens Property Insurance Corp. (SB1672).

Please ad the full article below and please call L & S at 1-888-244-7400 for quotes on Home, Auto, Flood, Business & Commercial & Life & Financial products as well.

http://www.insurancejournal.com/news/southeast/2014/08/20/338227.htm

Florida regulators have taken over an insolvent domestic residential property insurer, but a deal is in the works for another private company to assume the insurer’s 37,000 policies.

A Leon County Circuit Court judge issued an order earlier this week clearing the way for the state Department of Financial Services to take over Sunshine State Insurance Co.

In issuing the liquidation order, the judge cleared the way for United Property & Casualty Insurance Co. (UPC), which had looked into buying the insurer but pulled out of those talks, to assume Sunshine State’s existing policies.

Sunshine State’s financial woes became apparent in February when the insurer first reported to regulators that it would fail to meet a March 1 deadline to file its 2013 annual financial statement. Sunshine State reported that it had discovered an accounting error related to its 2008 and 2011 catastrophic reinsurance treaties. The cost of fixing those errors, plus an operation loss in the fourth quarter of 2013, forced the company officials to tell state regulators that it could no longer meet the state’s surplus requirements.

Insurance Commissioner Kevin McCarty then ordered Sunshine State to either increase its surplus by $15 million or be acquired or recapitalized by another company along with a good faith deposit as of May 15.

McCarty further ordered that if Sunshine State could not meet the May deadline, the insurer would be required to transfer its policies to another insurer or provide a 45-day written cancellation notice to its 37,684 policyholders.

United Insurance Holdings Corp., parent of UPC,  expressed an interest in purchasing Sunshine State in a letter of intent on May 15, the date regulators set for Sunshine State to either increase its surplus by $15 million or find a buyer.

However, a few weeks later, UPC President John Forney, in a letter to regulators, said that after a further review of Sunshine State it would no longer keep that commitment.

Please call L & S Insurance at 1-888-244-7400 for quotes on Home, Auto, Flood, Business & Commercial & life & Financial products as well. Please enjoy the full article below.

http://www.insurancejournal.com/news/southeast/2014/06/04/331022.htm

Responding to pleas from highway troopers and the state’s sheriffs, Florida Gov. Rick Scott said Tuesday he will veto a bill that could increase the speed limit on Florida highways from 70 to 75 mph.

Scott said that he has decided to “stand with law enforcement” who urged him to veto the legislation that narrowly passed the Florida Legislature late last month.

“I want everybody to stay safe, I don’t want anybody to be injured,” Scott said. “I think by doing this we are doing the right thing for our troopers and the right thing for law enforcement. I’ve been to too many law-enforcement funerals.”

The bill (SB 392) would not raise speed limits automatically, but would allow the Department of Transportation to increase them when it saw fit. The department could also raise the speed limit from 65 to 70 mph on rural, four-lane divided highways and up to 65 mph on other roads.

Legislators only approved the bill after a contentious debate where opponents said raising Florida’s speed limits would embolden motorists to drive faster and result in more accidents.

Sen. Jeff Clemens, D-Lake Worth, and one of the sponsors of the bill, contended that the safety concerns were not accurate.

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http://www.insurancejournal.com/news/southeast/2014/05/15/329313.htm

The Florida legislature has approved legislation setting out new insurer solvency requirements while also requiring individuals to disclose information about any affiliated company.

Sponsored by Senator David Simmons (R-Altamonte Springs) and Representative Clay Ingram (R-Pensacola), the bill (SB 1308) closely follows a National Association of Insurance Commissioners (NAIC) model act developed after the 2008 financial crisis.

The bill touches on a number of areas with the goal of streamlining the regulatory oversight. It provides regulators with more information to determine an insurer’s overall financial status.

Florida Insurance Commissioner Kevin McCarty said the bill would help protect policyholders by ensuring that insurers are properly capitalized.

Central to the bill is a provision that requires holding companies to disclose information about their operations. A holding company must annually provide a risk report to regulators. The report must contain detailed information about the firm’s business plan, developments in its risk management programs and any rating agency information.

Insurers also file annual reports with actuarial opinions on reserves and actuarial summaries.

The bill also sets out new reporting requirements related to individuals divesting their financial position in a company or investing in a company.

Among the changes are the revised definition of a controlling person as one having 10 percent of the ownership or interest in an insurer. Previously, an individual needed to have 25 percent ownership or interest of an insurer.

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http://www.insurancejournal.com/news/southeast/2014/05/04/328025.htm

The Florida House has rejected a proposal that could shift homeowners away from the state-backed Citizens Property Insurance and into private surplus lines insurers.

Rep. John Wood, R-Winter Haven, said that the issue was dead for this year’s session.

Lawmakers have taken several steps over the last few years to try to steer people away from the state-created Citizens. Citizens was set up initially to be an insurer of last resort but it grew as Florida was hit by hurricanes and private insurers sought to limit their exposure in the Sunshine State.

Last year, legislators approved creating a clearinghouse that requires insurance agents to look at offers from private insurers before allowing someone to purchase a Citizens policy. A customer is ineligible for Citizens if one of the insurers charges premiums that are within 15 percent of Citizens rates.

The Senate bill as originally passed would have added surplus line insurers to those that could be offered through the clearinghouse starting in January.

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http://www.insurancejournal.com/news/southeast/2014/04/30/327963.htm

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