Florida House, Senate Insurance Committees Meet–January 21, 2015

 

Insurance-related legislative committees met in both the Florida House of Representatives (“House”) and Florida Senate yesterday, January 21, 2015. 

Following is a summary of each meeting:

 

Florida Senate Committee on Banking and Insurance

The Senate Committee on Banking and Insurance approved one insurance-related bill as part of its agenda:  SB 130 by Senator Alan Hays would require Florida’s State Board of Administration to transfer a portion of its investment income from the Florida Hurricane Catastrophe Fund (“FHCF”) to the Florida Catastrophic Storm Risk Management Center (“Center”) during the 2015-2016 Fiscal Year.  The transferred amount would equate to the lesser of $1 million, or 35 percent minus $10 million of the FHCF’s investment income based on its most recent year-end audit.

Had the changes in SB 130 already been in place, funding to the Florida Catastrophic Storm Risk Management Center would have averaged $498,800 per year, based on the FHCF’s investment income for the last five fiscal years.

In previous years, the Center has received its funding by way of transfer from the Insurance Regulatory Trust Fund, which was authorized in the State’s yearly budget.  In fiscal year 2012-2013, the amount transferred to fund the Center’s operations was $350,000. In fiscal year 2013-2014, the amount transferred was $750,000, but included an additional requirement that the Center study and report to the Florida Legislature on alternative methods for managing the size of the FHCF.  In fiscal year 2014-2015, the amount transferred to the Center was $1.5 million.

The Senate Committee also approved SB 138, which would increase the Florida corporate income tax exemption from $50,000 to $75,000.

To view the meeting materials, click here.

 

Florida House Insurance and Banking Subcommittee

Chaired by State Representative John Wood, the House Insurance and Banking Subcommittee heard a presentation by Florida Office of Insurance Regulation (“OIR”) Deputy Chief of Staff Monte Stevens on the Florida insurance market. 

First focusing on property insurance, Mr. Stevens explained that reinsurance costs are currently lower, which has led to lower homeowners insurance premiums in some instances.  Citizens Property Insurance Corporation has continued to depopulate, which also has contributed to the health of Florida’s property insurance market, he added, noting that investors have shown interest in Florida because of recent legislative reforms that spurred increased competition.

According to the National Association of Insurance Commissioners, regulatory costs in Florida have decreased, Mr. Stevens noted.

He also discussed automobile insurance.  The OIR recently released the results of a data call on automobile insurance, which indicated that the statewide average savings for Personal Injury Protection insurance has been $65 for each vehicle–a number attributable to 2013 legislative reforms. 

Insofar as workers’ compensation, rates in Florida have decreased dramatically since 2003 legislative reforms, which also prompted an increasingly competitive market, Mr. Stevens said.  He reminded the Subcommittee that two workers’ compensation-related cases are pending before the Florida Supreme Court that could change the market, depending on their outcome.  The OIR is monitoring the status of these cases and will be prepared to respond if necessary.

Mr. Stevens also reviewed Florida’s health insurance market, which has not seen rate spikes or a large number of insolvencies, unlike some other states.

To view the meeting materials, click here.

 

Should you have any comments or questions, please contact Colodny Fass.

 

 

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