State Takeover Of Florida Wind Risk Pitched
National Underwriter
April 17, 2006

An insurance advocacy group last week urged creation of a privately-run state insurer to remove the private sector from providing hurricane insurance in Florida.

Americans For Insurance Reform issued a report-"At The Tipping Point: The Homeowner Insurance Mess in Florida & How To Fix It"-asserting that with more carriers leaving the state, others threatening massive cancellations and skyrocketing prices, the time for fixing the current system has passed.

The group proposed creation of a privately-run state insurer for the hurricane wind portion of homeowners' insurance coverage, with all of the wind business written by this entity.

"This would end low-risk cherry-picking by the insurers," the report said.

Also, by competitive bids, an insurer or multiple insurers would service the policies and be responsible for claims adjustment after a hurricane occurred, the report said.

Private insurers would still sell homeowners coverage-excluding hurricane wind coverage-to wrap-around coverage sold by the privately-run state insurer.

"If writing only the hurricane wind portion of the coverage proves too narrow a spread, consideration should be given to using this approach to write the entire homeowners' insurance policy for all Floridians," the report stated.

Sam Miller, executive director of the Florida Insurance Council, said that while his organization has taken no position on a state takeover of the hurricane business, the idea has been around for some time.

For a copy of the complete article, contact AIR.