Legislative leaders in Florida have announced the dates for a Special Session to address property insurance and reinsurance issues in the state, with the Session to be held from December 12th to 16th.
Back in October, it became clear that Florida’s lawmakers would again discuss urgent reforms for the state’s dysfunctional property insurance market before the end of the year.
The Governor of Florida Ron DeSantis said that he was planning a Special Session for December, with the focus expected to be on measures to improve the affordability of property insurance for citizens of Florida and stabilise the marketplace, as well as on potential further reforms to stem litigation and fraud in the claims process.
Now, a number of legislative leaders have announced that December 12th to the 16th will be the dates for the Special Session, providing further insights into what topics might be on the table, or are at least viewed as their priorities for discussion.
A formal proclamation for the Special Session and confirmation of these dates is expected after Thanksgiving weekend, but Gray Rohrer of Florida Politics reported that two legislative leaders have already confirmed these dates to their members.
House Speaker Paul Renner and Senate President Kathleen Passidomo both broadcast details of the Special Session, it is reported.
Renner wants to pass measures to encourage more private market involvement in Florida’s property insurance sector, as well as passing “systemic reforms” that can support a more functional market and reduce premium costs for policyholders over time.
But Renner acknowledged that there won’t be any quick drop in premiums for homeowners in Florida.
Saying that, “We’re going to look at the kitchen sink of options … and once we do that it’s important for people listening to know that this will not result in an overnight drop in insurance rates. We have to see probably two, three years as those policies turnover and we see a drop in the table of litigation.”
The current hardening of reinsurance will be another factor that supports and perhaps even elevates current homeowners premiums in Florida, so the Special Session may also discuss potential ways to further reduce reinsurance pressure for carriers operating in the state.
Renner said that he’d like to reduce the role of insurer of last resort Citizens Property Insurance Corporation over time as well, with more of Florida’s property insurance business flowing back to private insurers.
It’s expected that state backed reinsurance will be a topic for discussion during this Special Session of Florida’s legislative, as further measures could be taken to support insurance carriers.
If reforms take a number of years to have a significant effect, any further taxpayer backed reinsurance support could be a temporary measure, it seems.
Another area of discussion that is expected to come up in any property insurance Special Session are the potential for a property tax break for homeowners impacted by recent hurricane Ian.
Passidomo explained, “Next month, the Florida Legislature will convene in a special session to address the challenges still facing our state’s insurance market and ensure residents whose homes are uninhabitable get a break on property taxes. Hurricane recovery is just one of many issues we must tackle in the weeks and months ahead.”
This upcoming Special Session could be critical for Florida’s property insurance market, given the significant hardening of catastrophe exposed reinsurance rates and the fact next June’s reinsurance renewal will likely see Florida carriers’ reinsurance become more expensive and cover restrictive again.
As we said before, an aggressive stance on insurance fraud and litigation before the end of 2022, could help to make the Florida reinsurance renewal market in June 2023 less hard than it would otherwise have been.
This bears repeating, as it still holds true today:
Given the critical state of Florida’s property insurance market is now only set to become even more acute after hurricane Ian, it’s safe to say that this Special Session of the Legislature could be a “last chance saloon” for Florida’s lawmakers to get a grip on insurance fraud and provide real benefits to policyholders and carriers.
Failure to get a grip on Florida’s property insurance market and meaningfully reform it at this Special Session will guarantee additional significant pressures for insurance carriers, much (much) higher reinsurance pricing (it’s going to be high anyway, but absent reform it will be higher still), a lack of capital markets appetite for Florida property risks, plus inevitably much higher insurance prices for Florida’s communities.
Lawmakers, this is likely the last chance to act before 2023’s reinsurance renewals. Failure to adequately do so could plunge Florida’s insurance market into even deeper crisis, with inevitably significant ramifications for the state.
The door of the last chance saloon looks set to open in Florida this December.