My, how Florida is becoming ever friendlier to the insurance industry. From Insurance Journal:
Senate Bill 2498 would make it easier for Citizens to compete with the private market by allowing consumers to be covered if a private insurer is more than 15 percent higher than comparable coverage from Citizens.
Additionally the bill seeks to prohibit insurers from establishing wholly owned subsidiaries that operate only in Florida. The bill would allow existing Florida-only subsidiaries to continue doing business until their certificates of authority expire.
The article also includes a good quote-for-the-day from PCI AVP William Stander:
“Insurers don’t mind competition, but oppose operating in an environment where the state does not have to play by the same rules as private market insurers,” Stander said. “Through its tax-exempt status and artificially suppressed rates, Citizens can undercut the private market. This environment does not encourage insurers to come back into an already troubled market.[.]“
It has already been pointed out that this year’s property insurance reform has an unfortunate effect of simply deferring the costs of coverage in the event of a major storm. It sounds like the move to grow Citizens further with the implication of inadequate rates only means that those future assessments to recoup losses will only be that much larger.
That’s a climate that will only incent insurers to avoid exposing their capital further to the risk of doing property insurance business in the state.a situation that would be exacerbated by ending the availability of a Florida-only subsidiary to protect insurers’ surplus from the wrath of Mother Nature.