Florida Senate Committee on Banking and Insurance Meeting Report: February 16, 2012

The Florida Senate Committee on Banking and Insurance met today, February 16, 2012, during which it heard SB 1372 relating to the Florida Hurricane Catastrophe Fund (“FHCF”) by Senator J.D. Alexander.  SB 1372 is designed to reduce the overall financial obligations of the FHCF, as well as reduce the likelihood of, and amount of, bonding and emergency assessments needed to fund deficits in the event of a funding shortfall.

Dr. Jack Nicholson, the Chief Operating Officer of the FHCF, was available for questions after the bill was presented to the Committee.  He noted that, in Fall 2011, the FHCF was projected to have a $3.2 billion shortfall.  Because the financial markets are volatile, he said that in the event of a catastrophe the FHCF would have to go to the bond market to fund its obligations. 

When asked to quantify the FHCF’s rate impact to the average residential property policyholder, Dr. Nicholson suggested that the legislation may result in a 10 percent rate increase to the average homeowner’s policy, but that it would be more costly to replace FHCF coverage after an event if SB 1372 is not enacted.

Senator Alexander noted that the current situation was unsustainable and that the Legislature should take thoughtful steps to put Florida in a better financial position. 

The Committee adopted one technical amendment to the bill and passed it as a Committee Substitute by a vote of 8 to 1.

The Committee also heard Senate Bill 2082, which would reenact an existing public records requirement for certain records and meetings held by the Florida Workers’ Compensation Joint Underwriting Association.  The bill passed unanimously.

To view the meeting packet, click here.

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