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Since hurricane season will be here shortly, it's time to think again about preparedness. Well, your insurance carrier sure is and it may mean less cat money set aside. For those who were hit by multiple storms last year the deductible for each claim was expen$ive for you. Well, things may be changing and it may not be for the better. Want to see what YOUR carrier thinks of this? Interesting to see their positions...and their thoughts on up to a 37% increase in rates.
Hold on to your wallets when the wind blows....
Proposed Committee Bill IN 05-01
The bill proposes to change the Florida Hurricane Catastrophe Fund's retention structure from the current $4.5 billion per-event to a stepped structure of $4 billion for each of the first two storms, and $1.33 billion thereafter. PCI testified on behalf of its new policy position in favor of a single-season aggregate retention of no less than $4 billion, with the addition of a rapid cash build-up factor. The American Insurance Association, the Reinsurers Association of America, GEICO, and USAA testified against an aggregate or lowered retention, while Allstate, Liberty Mutual, and Nationwide testified in agreement with the PCI position.
PCI also testified in favor of several clarifications to the bill's mandatory disclosure requirements for policy coverages, mitigation credits, and financial illustrations. The Committee did accept an amendment delaying the effective date for the disclosure requirements from July 1, 2005, to October 1, 2005.
The bill also includes a provision to make the annual hurricane deductible (passed during the December, 2004 Special Session) optional for commercial residential policies. (The Senate Banking & Insurance Committee, in yesterday's hearing, passed a similar provision in the form of SB 1486. See attached.)
The PCB will now be introduced, and receive a bill number and committee references, although it will not necessarily return to the Insurance Committee. The Committees were responding to reports that annual hurricane deductibles for commercial residential policies would result in premium increases of up to 37 percent for those policies.
House Insurance Committee Chairman Dennis Ross (R-Lakeland), in general comments, stated that the House Insurance Committee would use next week's meeting to consider member bills, and the following week to workshop another property package that would include a response to Citizens' problems, sinkholes, and other contentious issues. Meanwhile, Senate Banking & Insurance Committee Chairman Rudy Garcia (R-Hialeah) has repeatedly stated his intention to seek "out-of-the-box solutions" not yet discussed. PCI believes generally that proposals more adverse to the insurance industry will likely come from the Senate. |
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