Florida property insurance market “in collapse”, special session uncertain
Lawmakers and insurance market interests continue to push for a special legislative session in Florida, to raise and enact property insurance reforms to prevent the local marketplace from continuing down a path towards total “collapse,” but there’s a lot of uncertainty still over whether it will happen.
Florida Senators, and interests in the insurance and reinsurance market, have been calling for a special legislative session devoted to Florida’s property insurance crisis after three property insurance-reform focused bills failed to pass in the recent session.
Measures included in those bills were designed to both limit losses for insurers, by attempting to control some of the runaway claims inflation, while also stemming price rises for Florida’s insurance consumers, and additionally looked to ensure policies could move out from residual market insurer Florida Citizens to be covered by private capital again.
But with all bills related to property insurance failing and now the 2022 Atlantic hurricane season fast-approaching and forecast to be quite active again, while Florida’s June reinsurance renewals are forecast to be among the most challenging ever for insurers, the urgency to at least reform something in the property insurance market is rising.
Senator Jeff Brandes (R – St. Petersburg), has been one of the most outspoken on the need for a special legislative session to address Florida’s property insurance crisis.
In a letter sent to other lawmakers on Friday, Senator Brandes explained that “Florida’s property insurance marketplace is in collapse.”
He urged for a special session to be called “immediately” to deal with the “critical issue” of Florida’s property insurance market and saying that he believes lawmakers need to act now.
The issue requires “immediate attention” prior to the 2022 hurricane season and as our readers will know, it is required sooner than later to be able to save some Florida property insurers, with more expected to face challenges in sustaining their ratings as the renewal approaches.
Support for Brandes call has been seen, with numerous lawmakers from the House and Senate saying they would support an urgent special session and sending letters to the Secretary of State calling for it to be held sooner than later.
A brief special session is already scheduled for April 19th in Tallahassee, but property insurance is not on the agenda at this time.
But House Speaker Chris Sprowls (R-Palm Harbor) has previously said he wouldn’t support a property insurance focused special session this year, saying that enough reforms have been enacted through 2021 and earlier that now need to be given time to work.
But with insurer failures continuing, Florida Citizens set to keep growing its policy count and exposure, reinsurance rates set to harden and some lower-layers of coverage becoming harder to secure, while loss development from prior year storm events continues to plague some carriers, going into hurricane season with no reforms could be a recipe for disaster and bring on the insurance market collapse lawmakers fear.
Even the regulator is trying to make changes where it can now, with Florida’s insurance commissioner David Altmaier saying to Office of Insurance Regulation can allow insurers to offer property cover that won’t pay the full cost of roof replacements.
That could address some issues, where roof claims have been deemed costly as a full replacement is made when not necessarily needed, but it doesn’t address the problems that could recur after the next major storm loss in the state of Florida.
There is bi-partisan support for the special session as well, with Democrat Representative Andrew Learned saying, “Homeowners’ insurance is completely out of control. Lets work together across the aisle to get this done.”
Others say they would support a vote for a special session, as long as there is a clear legislative plan that explains how the property insurance crisis in Florida can be resolved.
But many lawmakers are not providing immediate support, with some saying that a better time to address this would be after the next elections in November, at which stage the hurricane season will be all but over for 2022.