Important Message from CFO Jimmy Patronis

Below is an important message from Florida Chief Financial Officer Jimmy Patronis regarding your home and auto insurance benefits.

 

Consumer Protection Coalition

 

 

Take Action Today

Share this message with your family, friends and coworkers, and help prevent other Floridians from becoming a victim of AOB abuse by sharing on Facebook and Twitter.

Keeping Your Insurance Rates Low

The Florida Chamber of Commerce urges Congressman Vern Buchanan to stand with Florida in opposing proposals aimed at raising insurance rates and restricting free flow of capital. The “Neal” proposal in question would deny tax deductions for certain reinsurance premiums paid to foreign-based affiliates by domestic insurers, impacting Florida real-estate, businesses, consumers and employers.

 

Help Keep Florida Competitive and Insurance Premiums Low.

Learn more information by registering for the Florida Chamber of Commerce 2017 Insurance Summit, to hear from top business leaders about critical issues facing insurers.

Florida Property Insurance Fraud, Don’t Sign Your Rights Away

In Florida, there’s a rapidly growing scam in which a few shady home repair vendors pressure homeowners to sign away the rights and benefits of their insurance policies as a condition of performing work. This practice has led to grossly inflated claims and an explosion of Assignment of Benefit lawsuits against insurers, which is driving up the cost of homeowners’ coverage for consumers.

SHARE OUR VIDEO: Click on the arrow in the top right corner of the video.

Take Action Now

SHARE this video on social media or with your employees by tagging @FLChamber
SIGN the petition to urge the Florida Legislature to reign in Assignment of Benefits abuse and protect consumers.
LEARN MORE about the Florida Chamber’s efforts to create a competitive and stable insurance market

Urge Key Lawmakers to Support Legal Reform Efforts Today

On Tuesday, January 26, 2016, at 9 a.m. the Senate Banking and Insurance Committee will take up important legislation that will improve Florida’s legal climate. SB 632, sponsored by Senator Garrett Richter (R-Naples), requires written notice to an insurance company as a precedent to filing a bad faith lawsuit. The insurance company is then given 45 days to settle the claim and payout the provisions of the insurance policy.

Please click the “Take Action Now” button to email key lawmakers on this committee and urge them to support SB 632.
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A recent study by the Insurance Research Council found that bad faith lawsuits resulted in an additional $800 million in automobile liability claims payments, which breaks down to $79 per automobile policy. Not only does our litigious legal climate put Florida in the bottom 10 for favorable legal climates, but it’s increasing costs to Florida consumers.

This legislation is important to Florida’s business community because the bill:

  • Allows insurers to act in good faith prior to a bad faith lawsuit being brought forward;
  • Decreases frivolous litigation by trial lawyers; and
  • Improves Florida’s legal environment under which businesses operate.

Take Action Now

Click the “Take Action Now” button below now to urge key lawmakers to support legal reform efforts.

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Urge Key Lawmakers to Support Legal Reform Efforts Today

This afternoon, the Senate Banking and Insurance Committee will take up important legislation that will improve Florida’s legal climate. SB 632, sponsored by Senator Garrett Richter (R-Naples), requires written notice to an insurance company as a precedent to filing a bad faith lawsuit. The insurance company is then given 45 days to settle the claim and payout the provisions of the insurance policy.

Please click the “Take Action Now” button to email key lawmakers on this committee and urge them to support SB 632.

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A recent study by the Insurance Research Council found that bad faith lawsuits resulted in an additional $800 million in automobile liability claims payments, which breaks down to $79 per automobile policy. Not only does our litigious legal climate put Florida in the bottom 10 for favorable legal climates, but it’s increasing costs to Florida consumers.

This legislation is important to Florida’s business community because the bill:

  • Allows insurers to act in good faith prior to a bad faith lawsuit being brought forward;
  • Decreases frivolous litigation by trial lawyers; and
  • Improves Florida’s legal environment under which businesses operate.

Take Action Now

Urge key lawmakers to support legal reform efforts.

The Insured Value of Florida’s Shoreline Property is $2.8 Trillion

Florida is home to 1,350 miles of beaches and pristine coastline that draw residents and visitors from all over the world. But beyond the expansive surf of the Atlantic Ocean and the radiant seas of the Gulf of Mexico, lies inherent risk for property damage. The current insured value of Florida’s shoreline is $2.8 trillion, which is 79 percent of the state’s total insured property exposure. If a hurricane or natural disaster were to strike Florida, the economic damage could be catastrophic.

The population of Florida’s coastal regions has quadrupled over the past 50 years, growing by 10 million people. As more and more people move to Florida’s shoreline communities, a comprehensive and stable insurance market is needed or Floridians will continue to carry the risk.

Get Involved

To learn more about the issues facing insurers, business leaders and consumers, attend the Florida Chamber of Commerce Insurance Summit on October 26-28, in Orlando.

Just in Time for Hurricane Season: Property Insurance Catastrophe Fund is in Good Fiscal Condition

Good news just in time for the 2015 hurricane season. For the first time since its 1993 creation, the Florida Hurricane Catastrophe Fund (CAT Fund) has enough liquidity to cover the $17 billion statutory coverage, according to state data released last week.  Claims-paying estimates provided to the CAT Fund Advisory Council show the program will have $12.8 billion in cash on hand at the end of 2015. Two years ago, the CAT Fund began transferring risk and now has $4.2 billion in pre-event bonds and private reinsurance – providing the $17 billion capacity to pay claims for the 2015 hurricane season.

The Florida Chamber of Commerce has long-supported transferring risk to the private reinsurance market to aid in the fiscal health of the CAT Fund. However, there’s more work to be done. While the CAT Fund is now in a better position to protect insurers from their initial season of losses, the CAT Fund could still experience trouble if a second season of storms occurs, according to the data.

The claims-paying estimate data released last week also examined the CAT Fund’s capacity for a second season of storms.  The report assumes that the CAT Fund would not use the pre-event bonding in the first season, and instead would turn to the market for bonds – leaving the pre-event bonding to finance a second season of storms.

The estimated bonding capacity of the CAT Fund is $7.7 billion, which is down $600 million from the October 2014 estimate.  This would allow the CAT Fund to pay only 69 percent of its obligation for the second season, leaving roughly $5 billion in losses uncovered. Post-issued bonds will be paid back through assessments, or “hurricane taxes,” by all property and casualty policyholders, including automobile insurance.  Additionally, insurers may experience trouble during a second season of storms due to the lack of capacity for the CAT Fund to pay claims in this season.

To make Florida more competitive, the Florida Chamber has long-supported reducing the size of the CAT Fund – allowing insurers to plan for more than one season of storms. Share your voice. Contact Carolyn Johnson at cjohnson@flchamber.com to learn how you can help.

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.

Urge Lawmakers to Help Improve Florida’s Insurance and Legal Climates

On Wednesday, the Senate Judiciary Committee will hear two bills – one that would improve Florida’s insurance climate and one that would make Florida’s legal climate even worse than it already is. Please email these key legislators on the Senate Judiciary Committee and urge them to support SB 1064 and oppose SB 794.

SB 1064 sponsored by Sen. Dorothy Hukill (R-Port Orange), allows insurance companies to write policies that prohibit the post-loss assignment of benefits or rights other than for purposes of payment. This protects the homeowner by allowing them to maintain the rights of their policy but allows the contractor or subcontractor to be directly paid by the insurer.

SB 1064 is Important to Florida’s Business Community Because the Bill:

  • Protects insurers against inflated claims by insuring the homeowner maintains control of the repair and mitigation process
  • Balances the rights of the homeowner and the insurer when a loss occurs
  • Clarifies that insurers can prohibit the post-loss assignment of benefits as a part of an insurance policy

SB 794 (Prejudgment Interest) allows interest to be charged on damages from the date the injury or tort occurred, not from the date the legal decision was made. Delays in the legal system, which might not be due to the defendant, will only further drive up the cost of personal injury lawsuits. The result is that more companies will be forced to settle to avoid increased legal costs as a result of additional interest in a drawn out legal system.

Please take a moment now to contact these key legislators and urge them to VOTE YES ON SB 1064 and NO ON SB 794 during Wednesday’s Senate Judiciary Committee meeting.

 

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Share your opinion with key Senators on the Senate Judiciary Committee.

Did You Know Floridians Paid $1.5 Billion in Hidden “Hurricane Taxes”

Did You Know?

Florida Hurricane Catastrophe Fund (CAT Fund) hurricane taxes assessed on Floridians to pay for the six named storms of 2004-2005 will end this coming January – a year earlier than expected? However, Citizens Property Insurance Corporation (Citizens) hurricane taxes, also assessed for the back-to-back record-breaking 2004-2005 seasons, will continue to be assessed until 2017. To date, Citizens has received more than $1.5 billion in hurricane taxes from all Florida property and casualty insurance policyholders – auto, homeowners, businesses, charities, churches, renters and more.

Why does this matter to Florida’s business community?

Florida’s geographic location makes our state one of the most exposed places in the world to tropical windstorms and hurricanes. Of the 180 hurricanes that have made landfall in the continental United States since 1900, 65 have landed in Florida – the most of any state in the nation.

While it’s been nine years since the last major hurricane landfall, Florida’s experience during 2004 and 2005 shows our state is just one bad season away from tens of billions in damages. Between 2004 and 2005, Hurricanes Charley, Dennis, Frances, Ivan, Jeanne and Wilma hit Florida and caused more than $70 billion in damages. In addition, Hurricane Andrew in 1992 caused $25 billion in damages to Florida – equating to more than double that in today’s dollars.

The past nine years has allowed Florida’s insurance and reinsurance industry to build up reserves, but there still exists a major gap in how Florida addresses property and casualty insurance. If Citizens, the largest insurer in the state with more than 933,000 policies and $292.6 billion in total exposure, has a shortfall due to a series of storms, taxpayers are on the hook to pay these claims. These assessments could be borne by the business community.

Citizens currently has the authority to levy assessments on all property and casualty insurance in Florida including auto, business, home and renters insurance policies. This “emergency” assessment was put into place to help spread the risk among all policyholders in Florida in the event of a catastrophic storm. Currently, non-Citizens policyholders pay $136 million, or about 84 percent, yearly of the total assessments on all Florida property and causality insurance policies. These assessments are slated to be eliminated in early 2017.

Additionally, Citizens policyholders could be hit with a one-time 45 percent surcharge if Citizens depletes its savings and is unable to pay claims. This could impact businesses that rely on Citizens for property insurance coverage as well.

According to Stephen Weinstein, Senior Vice President with RenaissanceRe Holdings Ltd., Florida has taken significant steps in the last several years to strengthen the state’s property insurance market. Weinstein credits leadership at Florida’s Citizens Property Insurance Corporation and Florida Hurricane Catastrophe Fund for bolstering the financial position and reducing the risk of assessments on Floridians statewide.

“This has been complemented by the efforts of the executive leadership and professional management teams at Florida’s Citizens Property Insurance Corporation and Hurricane Catastrophe Fund to bolster their financial position and reduce the risk of assessments on Floridians statewide,” Weinstein said. “Collectively, these efforts have stabilized our property insurance system and attracted record levels of global capital to compete for Florida’s business. At the same time, Florida has also gotten lucky, by dodging a major storm for the past nine years.”

But this is Florida, after all, and our hurricane free streak could end at any time.

“In light of current conditions in the global private markets, Florida has an extraordinary opportunity right now to build on the success of recent years,” Weinstein explained. “This can be achieved by adopting a renewed business plan toward stability, in which insured risks are willingly borne by those who create them, and supported by a fairly priced, competitive private market, with our unique hurricane risk shared with and financed by private investors worldwide. We appreciate the significant and valuable reforms to date and hope to keep contributing to an ever more stable market for Florida’s consumers, homeowners and businesses.”

The stability referenced by Weinstein is a major step for Florida’s coastal communities, which accounts for approximately 80 percent of the state’s economic activity. Currently, the value of coastal property in Florida is roughly $2.0 trillion. This accounts for 80 percent of the state’s total residential and commercial property. More than 75 percent of Floridians live in a coastal county – meaning three out of four residents are in the direct landfall zone of a major hurricane. In addition, 12 of the 20 fastest growing coastal counties in the United States are located right here in the Sunshine State. Properties, both residential and commercial, within these counties have the most significant risk for hurricane damage due to high winds and storm surge. Ensuring stability for these communities throughout our state is a step in the right direction for our state’s slowly recovering property insurance systems.

And Citizens isn’t the only state-run liability that is in need of stability. The only state-sponsored reinsurance entity of its type, Florida’s CAT fund, may only be able to cover losses for one major storm or series of smaller storms. The CAT Fund is on the hook for $17 billion in claims, and while bonding capacity estimates show the CAT Fund may have the capability to pay these claims, Florida’s policyholders would have to foot the bill.

The end result? A system in which Florida’s financial stability could be decimated with one bad storm season, relying on post-storm assessments from Florida’s taxpayers for years to come.

Three Ways You Can Help Secure Florida’s Future:

  1. Join us at the 2014 Future of Florida Forum, September 29 – October 1. Join state business leaders, industry experts and elected officials as they discuss and explore how to secure Florida’s future, together. This year’s program features top level executives from several state agencies and identifies connection points and partnerships that will make Florida a state with vibrant communities, high-wage jobs and endless opportunities for global competitiveness. Register today and be part of the conversations that will help Florida stand out as the premier place to live, learn work and raise a family.
  2. Save the date for the Florida Chamber’s Annual Insurance Summit, January 21-23 at the Grand Floridian in Orlando. Plan to engage with the state’s top policymakers, industry leaders and business community experts as they tackle the challenges facing Florida’s insurance industry.
  3. Become a Florida Chamber Foundation Trustee and help provide a strategic direction for Florida’s future, to 2030 and beyond. For more information, contact Sal Nuzzo at 850-521-1283 or SNuzzo@FLFoundation.org.

Tell Us Your Story:

How has your business been affected by these assessments? Share your Florida story with us and stay tuned for more updates from The Florida Scorecard on Florida’s insurance industry.

 

About the Florida Scorecard Did You Know:

The Florida Scorecard, located at www.TheFloridaScorecard.com, presents metrics across Florida’s economy. Each week, the Florida Chamber Foundation produces a Scorecard Did You Know that takes an in-depth look at one specific statistic. If you would like additional information on the Weekly Scorecard Did You Know or on the Florida Scorecard, please contact Sal Nuzzo with the Florida Chamber Foundation at 850.521.1283 or snuzzo@flfoundation.org. You can also follow Sal on Twitter at @SalNuzzo and the Florida Chamber Foundation at @FLChamberFDN.

Did You Know Floridians Pay $1.4 Billion Due to Uncompensated Care?

Did you know? Floridians pay a “hidden tax” of $1.4 billion due to uncompensated care. When this cost trickles down from hospitals and insurance companies to insured Floridians, it equates to between $1,700 to $2,200 for every insured admission.

As Florida’s business community is well aware, healthcare costs continue to have a significant impact on the bottom line. As costs continue to increase, Florida businesses struggle to prosper and the overall competitiveness of the business community diminishes. This week’s Scorecard Did You Know highlights the real cost of rising healthcare expenses to Florida businesses, more commonly known as the healthcare cost shift.

“Hospitals need to manage care delivery differently, moving toward focusing more exclusively on outcomes and efficiency of treatment,” said Rich Morrison with Florida Hospital. “This is an issue and challenge for those of us in the care industry as well as the business community as a whole. Taking into account uncompensated care to the uninsured, unpaid deductibles and copayments, and unreimbursed costs from Medicare/Medicaid, Florida Hospital alone spent more than $400 million last year on treatment and care that was never paid for. When this number is added up across the industry, the results are a massive cost shift and represent a hidden tax that ends up being paid for by consumers, the insured, and the businesses that pay the majority of insurance coverage. In a state with such a sizable number of retirees, this is a pressing challenge for Florida over the next 20-plus years.”

Florida’s demand for healthcare services is typically much higher than other states due to a significantly higher population of retirees. Between now and 2030, the Florida Chamber Foundation estimates Florida’s population is expected to increase by six million residents. Of these, the Florida Office of Economic and Demographic Research estimates as many as 55.4 percent will be aged 60 and older.

Calculating this cost shift is complex, but a range can be estimated. The first step is comparing total costs of service to the total charges, which then is allocated among the 2.4 million yearly hospital admissions in the state. The analysis leads to a range of cost-shift of about $2,000 for each uninsured to insured admission and this estimate does not include the additional cost shifts present in the Medicare and Medicaid programs.

The cost shift occurs when the costs for medical care for the uninsured are “passed” onto insured patients. When a doctor or hospital provides care to an uninsured party, the costs of those services have to come from somewhere. Insurance companies are ultimately forced to incorporate them into higher premiums, which are paid (the majority of the time) by companies providing benefits for their employees. To make Florida more attractive for business startups and relocations, healthcare costs must be slowed and show real decline, especially with respect to the cost shift.

Learn More

Read the Florida Chamber’s Smarter Healthcare Coverage in Florida plan here.