Meeting Recap: Florida Cabinet – October 16, 2007

On October 16, 2007, the Florida Cabinet (i.e., Governor Charlie Crist, Chief Financial Officer Alex Sink, Attorney General Bill McCollum and Agriculture Commissioner Charles Bronson) met in Tallahassee, Florida.  The Cabinet heard from several government organizations within its jurisdiction.  Below is a review of the pertinent discussions and actions that occurred during this meeting with regard to insurance.

The Financial Services Commission (“FSC”) recommended that the Cabinet approve the new Board of Governors for the Florida Workers Compensation Joint Underwriting Association.  The Board is comprised of 9 members–1 consumer advocate and 8 Cabinet appointees, 5 of which are insurance industry representatives (2 domestic insurers, 2 foreign insurers and 1 agent) and 3 members of which are selected by the FSC.

The Cabinet approved the new Board of Governors.  Former State Senator Charlie Clary from Destin (and also Founder of DAG Architects) was named Chairman.

Jack Nicholson, Senior Officer of the Florida Hurricane Catastrophe Fund (“FHCF”) gave a brief presentation to the Cabinet regarding CFO Sink’s proposal for the FHCF Reform Legislation.  He presented a PowerPoint presentation which included a summary of the legislation, the objectives for the proposal, the basic structure of the FHCF, and a chart displaying optional coverage levels.  A copy of this presentation is included for your review.

CFO Sink concluded the presentation by stating that she developed this proposal because she was tired of hearing the insurance companies say that the timing of when they purchase reinsurance does not coincide with when the Legislature convenes to establish the CAT Fund coverages.  She has conducted research and determined that the purchasing of reinsurance as compared to the Legislative Session is about 6 months off cycle. In order to correct that problem the best time to address the CAT Fund coverage would be during the fall and the only body meeting at that time is the Cabinet. It is her belief that if the State had a mechanism in place similar to her proposal there would be an opportunity to stabilize the market and prevent large price increases.  She also stated that she would like to pass this legislation this fall if possible; however, due to the important focus on property taxes, she does not believe that will occur.  She does intend to pursue this issue during the Regular Session.

Commissioner Bronson stated concern over placing himself in a position of making decisions on this when he is not a member of the State Board of Administration for voting purposes.

Attorney General McCollum stated that he likes this proposal in principal and although the Legislature will ultimately decide what control they choose to yield, he agrees that there needs to be more flexibility in dealing with the CAT Fund and he would be happy to participate based upon the concept of her proposal.

Governor Crist applauded the CFO on her innovative idea and appreciated her thinking outside of the box while continuing to review new ways of dealing with this issue for Floridians. He is encouraged to have an opportunity to review her proposal in greater detail and work with the Legislature to determine its point of view on this.

The next Cabinet meeting will be held on November 14, 2007.

 

 
Please note that the material above is a brief summary of the discussion and events that took place during the Cabinet meeting. It is not intended to be a comprehensive review of any particular issues relating to the policies and/or programs discussed. Should you have any questions about any of the matters above, please feel free to contact this office.