Governor of Florida, Ron DeSantis has revealed his intention to call a special legislative session in May, with one of the primary goals being to debate and enact some property insurance market reforms in an attempt to slow the developing insurance crisis in the state.
Speaking at an event at a hospital in Jacksonville, Florida yesterday, DeSantis explained that the dates of the special session will be announced soon, once he has input from legislators, but that the session will go ahead and property insurance reform the primary goal.
More specifics on the reforms that will be considered during the special session are expected this week.
He specifically referred to bringing back some “sanity” and “stability” to the Florida property insurance marketplace, which will be music to the ears of reinsurance and ILS interests as they consider capital deployments into the state for the June reinsurance renewals.
As litigation continues to be rife and AOB cases appear to be accelerating in Florida, these challenges and their causes need addressing urgently if the state is to get a grip on escalating insurance and reinsurance costs there.
Without reform the escalation would likely continue and with it the carriers operating in Florida will continue to be challenged on a surplus and cost basis.
What exactly will be on the agenda is difficult to predict, but lawmakers seem to have a focus on the Florida Hurricane Catastrophe Fund, Florida Citizens and the litigation crisis.
Many in the industry would say solve the litigation crisis, so Florida’s property insurers can operate in a more functional and normalised manner and other issues may resolve themselves, but lawmakers are likely to place a focus on the sources of capital of last resort, especially as reinsurance is looking so costly for some layers of Florida catastrophe risk.
Of course, there are no guarantees any reforms make it through to enactment, nor what they might be, so the reinsurance renewal negotiations are going to continue at-pace and as they would have absent any legislative reforms.
Which means Florida’s property insurers can’t expect any respite this year, in terms of reinsurance costs and availability.
But this session announcement might just be a sign that an easier situation could be on the way for future years and renewals, if legislators focus on the areas that can have the greatest impact in terms of reforming Florida’s property insurance market.
Read coverage of Florida’s property insurance crisis below: