Florida Business Coalition Provides Policymakers With Guiding Principles For Resolving Insurance Crisis

Atlanta, GA - An unprecedented coalition of Florida business groups, including the American Insurance Association (AIA), recently unveiled a set of fundamental principles and interim policy recommendations aimed at restoring a competitive private insurance market in Florida.

The Florida Hurricane Crisis Coalition, under the auspices of Associated Industries of Florida (AIF), was formed to bring together members of the Florida business community to speak with one voice to policymakers in advocating property insurance initiatives that will create a sustainable property insurance market for both residential and commercial customers. Cecil Pearce, AIA vice president, Southeast Region, is a board member of AIF and served as a co-chairman of the Hurricane Insurance Crisis Coalition.

"Members of the business community are experiencing – both personally and professionally – the very real hardship of higher insurance premiums and lack of capacity in the Florida property market," said Pearce. "But they all understand that if Florida wants to restore a competitive private insurance market, the only solutions worth pursuing are long-term in nature and potentially difficult for all involved. The Coalition's interim recommendations for the upcoming special session are based on its guiding principles for reform: to maximize market-based solutions and minimize government intrusion."

Among the Coalition's guiding principles is an admonition to policymakers to be truthful with the public about the extent of Florida's hurricane risk, and how that risk impacts the amount of real premium savings from legislative proposals. Florida should support actuarially sound rates, and should not subsidize the rates of policyholders who live in high-risk areas. If further government involvement in insurance is necessary, it should be done so only under certain conditions. The Coalition will use all 12 of the guiding principles as a tool to assess legislation proposed for the special session.

For its part, the Coalition urges legislators to devote their time during the special session to a limited agenda focused on the most critical needs. These include measures to limit hurricane damage -- including several mitigation initiatives -- and addressing the affordability of property insurance through a temporary expansion of the Florida Hurricane Catastrophe Fund and providing additional insurance coverage options for consumers.

"AIA was pleased to play a role in this process, which involved in-depth study and deliberation by representatives from a cross-section of Florida's business community," said Pearce. "As one of the Coalition principles states, solving the insurance crisis will require a sense of shared responsibility from everyone. The Coalition's work to date is an excellent first step toward that goal."

SOURCE: American Insurance Association (AIA)