The Florida Senate voted in favor of a measure that will strengthen the state’s mandatory reinsurance program for the property insurance market.
The legislation, supported by Gov. Bob Martinez, was designed to help end a crisis in the state’s homeowners insurance market that had plagued it for years.
With an eye on the state’s financial stability, lawmakers also approved a bill that will make it harder for consumers to sue insurers over claims. The bill also includes other measures such as the removal of requirements for companies to maintain certain minimum amounts of capital in reserve, and the creation of a “single point of entry” for insurers to access federal funds after a catastrophe. serious natural, such as the strong hurricanes that have hit the last few months.
Voting in the Florida Senate
In special session, Florida lawmakers voted to make substantive changes to the state’s insurance laws. These changes were drafted by a committee of insurance industry representatives and sponsored by state Senator Mike Hensley, who has received more than $200,000 in campaign contributions from the insurance industry.
In its new version, the reforms focus on reducing insurance costs for homeowners, shifting more of the responsibility for catastrophic losses to reinsurers, tightening the limits on consumer claims and limiting awards for moral damages.
The new law will enter into force on January 1, 2023. Concerns have been raised that the law was passed in a rush, without sufficient time or consideration of its consequences. However, state legislature leaders believe these changes are necessary to protect consumers from rising costs.
Discrepancies in the approval of the reforms
Consumer rights groups in the state had fiercely opposed the legislation, but Gov. Rick Scott and other prominent state Republicans had welcomed it and called for changes to the so-called Citizens Property Insurance Corporation of Florida, which has been raising policyholder premiums in order to pay claims.
Republican leaders called the special session at the behest of Gov. Ron DeSantis. The legislature held another special session on homeowners insurance in May, when it voted to add $2 billion of taxpayer funds to the reinsurance fund.
Republicans hold a large majority in the state legislature after the November election, and tackling Florida’s homeowners insurance crisis is high on the agenda. Florida homeowners pay the highest insurance premiums in the US, with premiums increasing at a rate of 33% per year, according to the Insurance Information Institute.