Florida Chamber Urges Senate Committee to Oppose SB 1454, Hurricane Catastrophe Fund


Download Letter     Insurance Reform


To: Senate Banking and Insurance Committee

The Florida Chamber of Commerce urges you to oppose SB 1454, related to the Florida Hurricane Catastrophe Fund. This bill, proposed by Senator Jeff Brandes, will be heard Tuesday, February 20, 2018 in the Senate Banking and Insurance Committee.

The Florida Hurricane Catastrophe Fund (CAT Fund) was created after Hurricane Andrew to help stabilize Florida’s insurance marketplace and provide affordable reinsurance. The CAT Fund directly competes with the private reinsurance market. Florida insurers are required to purchase reinsurance through the CAT Fund up to the maximum obligation, which is $17 billion a season, regardless of the CAT Fund’s ability to pay. The State Board of Administration turns to the bond market if the CAT Fund does not have enough money to pay losses from a hurricane, which is then repaid through a “tax” on all insurance policies except workers’ compensation and medical malpractice. The cash build-up factor was created in 2009 to help increase the balance of the CAT Fund when the balance of the CAT Fund was at a historic low.

SB 1484 permanently eliminates the cash build-up factor even though the CAT Fund is not financially at its oneyear maximum capacity. Additionally, eliminating the cash build-up factor fails to contemplate a second season of storms, which could cause the State Board of Administration to turn to the bond market to fund losses. These assessments would then be levied on all insurers, regardless of whether they benefit from the CAT Fund. For these reasons, the Florida Chamber opposes SB 1484 and this issue has been included in the 2018 Florida Business Agenda.

This bill is opposed by Florida’s business community because it:  Puts the short term ahead of the long term by eliminating the cash-build up factor which is used to increase the CAT Fund’s balance;  Increases the risk of hurricane “taxes” if Florida is faced with a series of storms or multiple seasons of storms; and  Creates economic uncertainty for insurers which are required to purchase reinsurance through the state’s CAT Fund.

The Florida Chamber urges you to oppose SB 1454, and will consider votes on this legislation, and any substantive amendments to it in committee or on the floor, in our annual How They Voted report card. Because of the importance of this issue to employers across the state, our Board of Directors has determined that this bill, and any substantive amendments to it in committee or on the floor, will be counted twice on our legislative report card. The grade that you earn will be based on your voting record on the issues, such as this one. We will make every effort to notify you prior to a vote that may be included in our annual legislative report card. If you have any questions about this or other issues, please do not hesitate to contact me.


Frank C. Walker, III
Vice President of Government Affairs

Smart Property Insurance Reforms Equal Consumer Savings

The Florida Chamber’s Bottom Line Featuring Michael Carlson

“We are in the best positon as a marketplace that we have been in for about 10 years now,” said Michael Carlson, Executive Director of Personal Insurance Federation of Florida (PIFF). “Our companies are more solvent, they are better able to make claims, and more importantly our backstop- the Hurricane Catastrophe Fund, our Citizens Property Insurance Corporation, which you know is a government supported entity- are both in the best fiscal shape they’ve been in.”

This is due in part to the smart reforms that have been enacted throughout the past several years such as creating more sustainable Citizen’s Property Insurance rates- allowing private companies to competitively take policies, creating a Citizens Clearinghouse program to help move policies into the private market, and reducing fraud in sinkhole claims.

But while our insurance markets are moving in the right direction, special interests groups continue to fight to make Florida’s insurance markets more expensive for families and businesses alike. For workers’ comp, this is a dangerous problem that could cost businesses increased rates.

“Trial lawyers today are challenging the very smart reforms that have been enacted in Florida since 2003 and if they are successful, you will see cost increases in the workers’ comp systems that will affect Florida’s businesses and Florida’s consumers.”

For property insurance, it could equal direct increased costs to homeowners.

“There is a worrisome trend developing in Florida where the cost driver that’s particularly related to roofing and water claims in the homeowner prop insurance market,” shared Carlson. “There is a legal tool called an ‘Assignment of Benefits’ which we believe is being abused by a cottage industry of unscrupulous vendors and trial lawyers that is causing rates to increase. We need to do something about that.”

One solution, Carlson says, is attending the Florida Chamber’s Insurance Summit January 26-28 in Orlando.

“It’s an important gathering. In fact, I would say that the importance cannot be understated,” said Carlson. “The prominent thought leaders, prominent stake holder groups, company executives and representatives, legislators, elected officials, academics all gather under the auspices of the [Florida] Chamber at this event to talk about the problems that we face in property insurance and other insurance markets and more importantly talk about solutions, smart solutions, to address these problems.”

Join Us:

Register today for the Florida Chamber Insurance Summit January 26-28 in Orlando.