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Florida Looks to Change Reinsurance Collateral

When the 2008 legislative session ends, it might be considered the year that legislators discovered the definition of reinsurance and the impact it has on insurers' abilities to write business. That

By Michael H. Adams | Updated on March 31, 2008

When the 2008 legislative session ends, it might be considered the year that legislators discovered the definition of reinsurance and the impact it has on insurers’ abilities to write business. That may be the number one lesson that came out of the hearings of the Senate Select Committee on Property Insurance Accountability, which while refraining from making formal recommendations to the legislature, none-the-less put the role of placed reinsurance squarely in the middle of any future property reform debates.

The focus on reinsurance is also reflected in Chief Financial Officer Alex Sink’s proposal to roll back the market’s reliance on the Florida Hurricane Catastrophe Fund by $3 billion, a proposal that recognizes that last year’s move to expand the fund by $12 billion could lead to large policyholder assessments. It also raised the question of whether it is even feasible for the fund to raise that kind of money in the capital markets.

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