September 7, 2006
Today at the meeting of the Property & Casualty Insurance Reform Committee, the FHCC letter and the AIF letter were hand delivered to the Committee. Committee members cited the issues and the rationale expressed in these two letters, and the outcome was very favorable.
First, the Committee decided NOT to expand any potential assessment (taxes) to workers’ compensation policies. This is a very important victory because of the potential to increase the cost of workers’ compensation insurance. This concern was explicitly expressed in the Florida Hurricane Crisis Coalition letter.
Second, the Committee rejected the proposal to expand the Florida CAT Fund coverage by lowering the retention level of the Fund. This expansion of the coverage would have significantly increased the likelihood of deficits in the fund, and thus assessments against businesses' property and casualty insurance premiums. This was another key victory, and it shows that the Committee members were mindful of the issues raised in the AIF letter. The Committee accepted a proposal to offer optional coverage below the current retention level at subsidized rates. However, the Committee insisted that the coverage be offered at near private reinsurance market rates. This pricing is consistent with the Coalition's recommendation that any expansion of coverage in the CAT Fund and the other government-run insurance entities be pre-funded and not subsidized by taxes against businesses' insurance.
At the October 4th meeting of the Committee, members are going to discuss and consider commercial insurance issues. At that time, we hope to be able to testify to the full Committee.
Thank you for your support. We have won a battle; the war still must be fought. So please stay vigilant. Thanks and take care.