South Florida Sun Sentinel
by Brian Nelson
May 19, 2011
In response to “Insurance premiums could double,” I would like to give your readers the rest of the story.
Senate Bill 408 did not raise insurance rates; it simply gave insurance companies the ability to recoup increasing costs of reinsurance more quickly. The Office of Insurance Regulation still has to approve the expedited rate filing, and if found unwarranted, the insurance company would be required to return the excess premium to the policy holders.
The average rate increase in the past two years by the top 20 private insurance companies in Florida was 15 percent. By comparison, Citizens averaged only a 7 percent rate increase over the same time period. One Florida carrier had the need for a 40 percent rate increase last year but only requested a 3 percent increase because Citizens was their main competition. How do you compete with a carrier that doesn’t buy reinsurance and depends on business owners, nonprofits and home and auto policyholders to bail them out when a storm hits?
The object of SB 408 was to reduce the cost factors and to entice major carriers to start writing polices in Florida again. As my good friend Rep. Bill Proctor said, “if you move to Pittsburgh, expect to shovel snow in the winter, and if you live on the coast of Florida, expect to pay more for your insurance.”
State Rep. Bryan Nelson, chairman of the Subcommittee of Insurance and Banking
