R Street praises Gov. Rick Scott for signing private insurance marketplace bill
TALLAHASSEE, Fla. (June 16, 2014) – The R Street Institute welcomed Friday’s signing of SB 542 by Gov. Rick Scott, approving rules guiding the state’s emerging private flood insurance market that track broadly with principles R Street outlined before this year’s legislative session.
“By signing this bill into law, Gov. Scott has expanded choice to Florida’s consumers who would otherwise be stuck with inflexible, expensive flood insurance coverage from the federal government,” said R Street Florida Director Christian Cámara. “We are particularly thankful to Sen. Jeff Brandes, who sponsored the bill and spearheaded the effort. Since the much-needed reforms to the National Flood Insurance Program, we have seen interest by private carriers to offer similar coverage, often for less. Now, Floridians will be able to reap the benefits of those offerings.”
Most importantly, R Street praised provisions of the legislation that would preclude the state-run Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund from moving into the market for private flood insurance. While Citizens should be commended for moving to address its capital structure with appropriate risk transfer mechanisms, the Cat Fund has failed to do the same and coverage sold by Citizens remains dramatically underpriced. A major hurricane could still cause both entities to levy billions in post-storm “hurricane taxes” on nearly every policy in the state.
“We are pleased the Legislature and the governor chose to avoid placing any more risk on the backs of Florida taxpayers and policyholders,” Cámara said. “Simply shifting the risk from the federal program, which is already $25 billion in debt, to the sate would have been a step backward. Allowing private insurance companies to sell flood insurance in a competitive market is a major step in the right direction toward real reforms in flood insurance.”
R Street’s November 2013 report, “A state approach to flood insurance reform in Florida,” can be found here:
http://www.rstreet.org/policy-study/a-state-approach-to-flood-insurance-reform-in-florida/
