Florida Governor Jeb Bush today signed into law legislation aimed at helping the state's insurance market as well as homeowners better cope with a severe hurricane season.
The legislation, Senate Bill 1980, offers $250 million in loans to insurance companies to help them continue to write coverage and to take policies from Citizens Insurance, the state's insurer of last resort. Starting next July, the bill also increases insurers' flexibility to increase rates, allowing for adjustments of up to 5 percent statewide and 10 percent in a particular region.
Citizens will receive $715 million to offset its current deficit under the legislation, but will have its obligations increased as well. As of March 2007, Citizens will be required to collect enough premiums to prevent a deficit in the "worst case scenario" of a once-in-70-years storm. Should the company overspend, it will be required to look first to its policyholders.
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