Charlie Crist proposes a federal solution for home insurance reform

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The Florida Legislature is meeting this month on property insurance reform, but could Congress beat them?

Rep. charlie christa St. Petersburg Democrat, on Thursday introduced legislation to reduce home insurance premiums.

The Providing Affordable Insurance for Homeowners Act, or FAITH Act, would provide a federal backstop for catastrophic losses by providing loans to state insurance commissioners for insurance costs above a threshold defined. The loans could be repaid at low interest rates over the next decade, similar to federally backed terrorism risk insurance support authorized following the 9/11 terrorist attack in 2001.

Democratic gubernatorial candidate Crist ostensibly filed his bill after insurance reform failed to pass in the Legislative Assembly this year.

“While the Florida government is busy waging culture wars, our people are faced with a chaotic and deteriorating property insurance market driven by excessive reinsurance at exorbitant rates,” Crist said. “With hurricane season fast approaching, premiums are becoming increasingly unaffordable and carriers are exiting the market altogether. Floridians can’t wait for bold action to lower premiums, and that’s exactly what my bill would do.

The coup prompted political leaders in Florida to prioritize provocative grassroots bills, such as a prohibition K-3 teachers to include anything in the curriculum regarding sexual orientation or otherwise ban abortions 15 weeks pregnant. In the meantime, issues such as insurance reform or building code update after the deadly collapse of a South Florida condo tower failed to clear both rooms.

Govt. Ron DeSantis called on the state legislature to reconvene from May 23-27 for a special session on insurance.

In his appeal, DeSantis said he wanted the exclusive purpose of the session to be consideration of bills regarding property insurance, reinsurance, Florida building code changes, the Office of Insurance Regulation, Civil Remedies and Credits.

It is unclear what might be agreed at the extraordinary session. Earlier this year, the Florida Senate passed a bill (SB 1728) which would allow a deductible on the roof and allow Citizens Property Insurance, the public insurer of last resort, to raise rates more quickly. This is a different solution than the one proposed by Crist.

It should be noted that state legislation ran into a hurdle because the Speaker of the House Chris Sprows expressed skepticism and instead wanted to see the potential impacts of the reforms past in 2021.

The proposed solutions in the Republican-controlled legislature have looked very different from Crist’s proposal, and of course there are different tools available to the state or federal government.

It’s unclear if the federal legislation could serve as a template for a bill DeSantis might sign into law. But the bill has the support of the Federal Association for Insurance Reform and other industry experts.

“Reinsurance is the largest expense for home insurance companies, and these expenses are ultimately passed on to consumers through their insurance premiums,” said Paul Handerhan, President of the Federal Association for Insurance Reform. “Creating a federal catastrophic excess of loss (CAT XL) backstop for the most severe natural disasters will stabilize an increasingly volatile insurance industry driven by the increased frequency and severity of weather events. catastrophic. If this legislation is codified into law, consumers will benefit from greater competition in the market, an increased supply of insurance products and significantly less price pressure on their insurance premiums for the coverage of natural disasters.

Broward County Commissioner Steve Gellerformer chairman of the National Council of Insurance Legislators, also applauded the bill.

“This simple plan will significantly reduce insurance rates for homeowners, condo and co-op owners, and renters,” he said. “Today, reinsurance in Florida can represent 50-60% of the cost of insurance premiums, and this program will significantly reduce the cost of reinsurance. It does this at no cost to the state or federal governments, simply using the vast resources of the federal government to guarantee payouts to insurance companies for the worst natural disasters. These payments would be reimbursed to the federal government by the states, but at Treasury bill rates, not the vastly inflated rates charged by reinsurers. Florida residents struggle to find available and affordable insurance. This plan will take care of both availability and affordability of insurance.


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