The Florida Senate Banking & Insurance Committee passed legislation last month that would reduce the state-funded reinsurance, which insurers are permitted to purchase in addition to the Florida Hurricane Catastrophe Fund coverage (Cat Fund). The measure, backed by Florida’s Chief Financial Officer Alex Sink, is designed to shed some of the state’s hurricane risk.

Senate Bill 2156 would eliminate certain coverage options, thereby reducing the optional state reinsurance coverage, known as Temporary Increase in Coverage Limits (TICL).  Under the Senate bill a maximum of $9 billion in coverage would be offered in addition to the mandatory Cat Fund coverage.  Additionally, the Senate bill proposes to reduce the maximum reimbursement available under TICL from 90 percent to 70 percent of the insurer’s losses within the optional coverage layer purchased.

Florida Chief Financial Officer Alex Sink congratulated the Florida Senate Banking & Insurance Committee for unanimously passing Senate Bill 2156, which she believes ultimately will reduce the exposure of Florida’s consumers.  Sink stated:

I thank Sen. Posey and his Senate colleagues for their leadership and support of this bipartisan proposal to reduce the risk of hurricane assessments on Floridians and businesses.  With their support, we are eliminating the risk of $5.5 billion in hurricane assessments if we have a bad storm this year.

As reported here, the companion bill is HB 7021, sponsored by State Representative Ron Reagan (R-Sarasota/Bradenton).