It’s time to pull up the comfy chair and to grab a bag of popcorn, because the upcoming special session of the Florida legislature looks to be potentially entertaining…if you’re an insurance-and-politics geek, anyway.
An article at Insurance Journal provides a decent cheat-sheet on the ideas that may be explored this week. They include:
- Mandating Citizens roll back its rates by about 20%
- Permitting Citizens to actually compete with private insurers by selling coverage at market rates, and expanding beyond its wind-focused product
- Setting the state government to act as a reinsurer to the private market
- Prohibit or restrict Florida-only subsidiaries of national insurers
- Requiring companies that write homeowners anywhere in the country to offer HO in FL if they want to do any business at all there
- Excess profits limitation
If the state has determined that permitting the free market process to work in determining pricing and availability of coverage is not in the best interests of the people of the State of Florida, I think that the state assuming the underwriting risk is probably the only solution.
However, I’m also pretty sure that politicians in Florida are deluded about how expensive providing property coverage in a cat-prone state really is, and that they are unprepared for the political debate when folks on the coasts start calling on less-exposed residents to subsidize the risk.