Florida Insurance Commissioner Kevin McCarty has come out full force in support of property bill SB 2044, passed in the final hours of the 2010 Florida legislative session.
In a four-page letter today to Gov. Charlie Crist, McCarty declared that the legislation offers benefits to "consumers, the Office's regulatory oversight, and the viability of the insurance marketplace." He further noted that it "strikes an appropriate balance that will have lasting benefits for the people of Florida."
McCarty outlined his reasons for support by citing several specifics in the omnibus legislation.
He said that continuing the prohibition of "use and file" rate filings will help prevent "excessive rate increases from being implemented." He also reiterated his previous statements concerning the much-reported "automatic" 10 percent rate increases, noting that SB 2044 allows for rate changes only upon review by his office.
He had praise for the increased surplus requirements, which raise the minimum capital requirements to $15 million for new property insurance companies and at least $10 million by 2015 and $15 million by 2020 for existing companies. The failures of several property insurers in the past year has been a hot topic of conversation among all stakeholders.
During the recent legislative session, many insurers were adamant that any new laws address the issue of cost drivers within the property insurance system. A major topic of that discussion was the role of public adjusters, a fact McCarty noted in his letter to Crist. "One of the biggest factors impacting insurance companies has been the rapid rise in claims initiated by public insurance adjuster," he wrote. SB 2044 institutes a three-year filing limitation for submitting hurricane and windstorm claims to an insurer.
He also said that the statutory changes to "replacement cost" methodologies "strikes an appropriate balance" between policyholders and insurers.
McCarty's strong support of the far-reaching bill will be welcomed by insurers. Whether it will have a positive impact on Gov. Crist's decision to sign the bill remains to be seen.