Florida Chamber-Backed Property Insurance Reform Approved

The Florida State Board of Administration this week approved a Florida Chamber-backed effort to protect Floridians from future hurricane tax assessments. Governor Rick Scott, Attorney General Pam Bondi, and Chief Financial Officer Jeff Atwater approved giving the Florida Hurricane Catastrophe Fund (CAT Fund) authority to pursue transferring up to $2.2 billion in storm risk to global financial markets in an effort to prevent Floridians from paying future hurricane taxes.

“The Florida Chamber applauds the decision by the State Board of Administration to explore global financial markets to transfer risk from CAT Fund out of the state’s border,” said David Hart, Executive Vice President for the Florida Chamber. “While reinsurance rates are among the lowest in many years, and with the unpredictability of a looming hurricane season, the time to act is now.”

The Florida Chamber has long-advocated that homeowners should be provided with creative, market-based solutions to Florida’s natural disaster risks. Earlier this year, the state of Florida eliminated CAT Fund hurricane tax assessments on Floridians. Thanks to the State Board of Administration’s action this week, future storm risks may be transferred to the private reinsurance market and likely prevent Floridians from being assessed hurricane taxes in the future.

Watch Insurance Leaders Speak:

Watch Florida Insurance Commissioner Kevin McCarty, CFO Jeff Atwater and other insurance industry leaders speak at the Florida Chamber’s 2015 Insurance Summit by clicking here.

Elimination of Hurricane Tax Assessments Means More Money in the Pockets of Floridians

FOR IMMEDIATE RELEASE
CONTACT: Edie Ousley, 850-521-1231 or 850-251-6261
eousley@flchamber.com

 

Floridians Have More to Celebrate on New Year’s Day
Elimination of Hurricane Tax Assessments Means More Money in the Pockets of Floridians

TALLAHASSEE, FL. (December 22, 2014) – For the first time since 2004, Floridians will have more to celebrate on New Year’s Day than just the dawn of 2015. Floridians will also celebrate the elimination of hurricane tax assessments on their insurance policies and a savings to their bottom line, the Florida Chamber of Commerce announced today.

Insurance policies issued or renewed after January 1, 2015, which includes automobile, business, homeowner, charity, religious institutions, rental, local government and school boards, will no longer include the Florida Catastrophe (CAT) Fund Emergency Assessment hurricane tax. The assessment, which results from the 2004-2005 back-to-back hurricanes, will end a year early thanks to actions taken earlier this year by Governor Rick Scott and the State Board of Administration.

“This is great news for Florida families and small businesses, and further evidence that Florida is moving in the right direction,” said Mark Wilson, President and CEO of the Florida Chamber of Commerce. “While Florida’s storm-free years have benefited Floridians by eliminating hurricane tax assessments, it would be irresponsible to believe Florida will forever be spared from future costly storms. Now is the right time to prevent hurricane taxes from creeping back onto to insurance policies by looking to private market solutions to absorb Florida’s future hurricane risk.”

The 2004-2005 hurricanes resulted in more than $70 billion in damages, and the CAT Fund reimbursed $28.98 billion for residential losses over those two storm seasons.  However, what resulted was a 1.3 percent assessment on all insurance policyholders to pay back $2.6 billion in unfunded liabilities –that’s $350 to $500 million collected from policyholders annually.

“Almost every consumer will benefit by the decision of the State Board of Administration to end hurricane taxes nearly a year early,” said Michael Carlson, Executive Director of the Personal Insurance Federation of Florida. “It demonstrates that we have managed the CAT Fund well, and is another sign that Florida’s property insurance market is healthy.”

Despite the CAT Fund’s good health — $10.9 billion in cash on hand – one storm or a series of storms like 2004-2005 could again deplete the funds and leave Florida insurance policyholder at risk. That’s why the Florida Chamber has long-supported reforming Florida’s CAT Fund – to better protect Florida’s families and businesses from financial disaster.

 

 

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The Florida Chamber of Commerce is the voice of business and the state’s largest federation of employers, chambers of commerce and associations, aggressively representing small and large businesses from every industry and every region. The Florida Chamber works within all branches of government to affect those changes set forth in the annual Florida Business Agenda, and which are seen as critical to secure Florida’s future. The Florida Chamber works closely with its Political Operations and the Florida Chamber Foundation. Visit www.FloridaChamber.com for more information.