House Jobs and Entrepreneurship Council Meeting Report–Feb. 21

On Thursday, February 21, 2008, the House Jobs and Entrepreneurship Council met to discuss Proposed Committee Bill 08-01 regarding the Florida Hurricane Catastrophe Fund (“FHCF”). The bill reduces the Temporary Increase in Coverage Limits (“TICL”) layer of coverage from $12 billion to $9 billion and sets the FHCF reimbursement at 70 percent of the insurer’s loss. It would also reorganize the FHCF outside the State Board of Administration (“SBA”) to be under the oversight of the Cabinet.

Council chairman Ron Reagan opened the meeting, briefly described the proposal and intoduced Alex Sink, Florida’s Chief Financial Officer (“CFO”), to address to Council. Her comments focused on the need to reduce the State’s exposure to assessments. She noted that reinsurance capacity has increased and the State’s risk can, and should be reduced. She felt that this bill would have a minimal, if any, impact on rates.

Next, Florida Department of Financial Services Director of Legislative Affairs Michael Carlson addressed the Council and further explained the bill. He stated that the CFO is very concerned about risk and this bill is a continuation of the good work done in 2007. The CFO’s rate impact is projected at 1.5 to 2.0 percent. Representative Carlos Lopez-Cantera pursued a line of questioining expressing his concerns that voting for this bill could increase rates.

Following Mr. Carlson’s presentation, the Council discussed the bill. Chairman Reagan noted that this bill will begin an orderly reduction in state exposure. Representative Richardson commended the CFO on her proposal.

Next, the Council took public testimony. Several business groups (Associated Industries of Florida, the Florida Chamber, Florida United Business Association) and industry representatives (Florida Association of Independent Insurance Agents) spoke in favor of the proposal.

The bill was voted out of Committee favorably.

To view the Council packet for the February 21 meeting, click here.

CFO Sink later applauded the Council for unanimously passing PCB JEC 08-01 – the Florida Hurricane Catastrophe Fund Risk Reduction Bill, saying “On the eve of another Hurricane Season, the Legislature has taken an important step to reduce the risk of billions in assessments forced on Floridians when we have a bad storm. I thank Chairman Reagan and the members for their leadership on this bipartisan proposal and for recognizing the tremendous impact of these hidden taxes on the people of Florida.”

 

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