The Florida Office of Insurance Regulation (OIR) said it is terminating a 1.3% assessment on property policies 18 months ahead of schedule.
The Florida Hurricane Catastrophe Fund (Cat Fund) emergency assessment, which the OIR says brought in $2.9 billion through May 31, 2014, was used to reimburse insurance companies for claims from eight hurricanes that hit Florida in 2004 and 2005. The OIR says it has paid off the bond used to pay the claims early.
The assessment applied to all premiums on property and casualty insurance policies in Florida, including surplus lines but excluding lines specifically exempted by law, the OIR says. The charge began at 1% in 2007 and was increased to 1.3% in 2011.
The OIR says the cat fund currently has $12.95 billion available, “which is made up of a projected 2014 year-end fund balance of $10.95 billion and $2 billion in pre-event bonds, with additional borrowing ability to pay future claims – its highest level in recent years.”
According to the OIR's two orders—one sent to P&C insurers and the other to the Florida Surplus Lines Service Office (FSLSO) and surplus lines agents—while all policies issued on or after Jan. 1, 2015 will no longer be subject to the assessment, it will still apply to the “direct-written premium on all related transactions including, but not limited to, endorsements, policy cancellations, and audit premiums related to policies issued or renewed prior to Jan. 1, 2015….”
In a statement, Donovan Brown, state government relations counsel for the Property Casualty Insurers Association of America (PCI), says, “PCI and its members applaud Governor Rick Scott and the Florida Cabinet for their years of leadership and dedication to terminate emergency assessments on Florida's consumers. Under their direction, the property-insurance market has continued to rebound from the failed policies of former Governor Charlie Crist. Today's announcement is proof that the Florida property market is moving in the right direction, and will continue to benefit consumers and other stakeholders. Barring a major catastrophe, PCI and its members are cautiously optimistic that the Florida property market is making great strides.”
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