Florida Legislative Leaders Propose Major Property Insurance Changes

On February 13, 2006, three weeks before the start of the 2006 Florida legislative session, leaders of the state House of Representatives announced a proposal, PCB IN 06-01 ("the bill")¹, that restructures the residual market, provides additional revenue for the Florida Hurricane Catastrophe Fund ("Cat Fund"), creates incentives for hurricane-related retrofits of homes, and adds regulatory reforms.

Florida’s property insurance market has been in a state of turmoil ever since Hurricane Andrew struck the state in 1992. Legislative attempts to maintain insurance availability and affordability have included expansion of the residual market, creation of a catastrophe fund, and a series of changes to the Insurance Code affecting rates, coverages, and claims handling.² The problem has escalated recently, as a result of the unprecedented 2004 and 2005 hurricane seasons.