Gov. Jeb Bush and the Florida Cabinet approved an emergency rule establishing a property and casualty joint underwriting association.
The JUA will make commercial property insurance available to Florida businesses that are unable to find coverage in either the admitted or surplus lines insurance markets.
The new entity will be run by a 13-member board that will be appointed by the Chief Financial Officer. The plan was drafted to enable it to operate as a reinsurance facility.
The Cabinet voted unanimously to establish the rule for 90 days and to have the Office of Insurance Regulation continue the normal rule-making process dealing with the same issue during that time. Under existing law, the state can form an association to help provide commercial property coverage if enough businesses appeal to the state because they cannot access adequate insurance.
The OIR has received numerous requests for assistance from those who have had their coverage reduced, their premiums dramatically increase, or who have not been able to obtain coverage at all.
“I have heard from too many Florida business owners who are facing losing their insurance in the middle of hurricane season,” said Insurance Commissioner Kevin McCarty in a statement. “If left unchecked, this problem will have a negative affect on our state's economy, as we have already heard from businesses that may have to move out of Florida.”
The plan approved today makes use of a 1986 statute dealing with a commercial insurance crisis at that time. It created a JUA, which eventually was deactivated. But the enabling statute remains on the books, along with the triggering mechanisms which allow it to be reactivated.
American Insurance Association representative Julie Pulliam told the NU Online News Service that she considers the JUA a short-term fix. “But we understand that Gov. Bush had to do something because there is a segment of the market that is in need,” she said.
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