TALLAHASSEE, Fla. (May 1, 2014) – The R Street Institute today welcomed the vote by the Florida Legislature to approve rules guiding the Sunshine State’s emerging private flood insurance market that track broadly with principles R Street outlined before this year’s legislative session.

“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,” R Street Florida Christian Camara said.  “Sen. Brandes’ bill eases barriers to competition and expands choice to Florida consumers who would otherwise be stuck with inflexible, expensive flood insurance coverage from the federal government.  Gov. Scott would do well to sign this bill quickly and extend its benefits to Floridians.”

Most importantly, R Street praised provisions of the bill 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 drastically 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 chose to avoid placing any more risk on the backs of Florida taxpayers and policyholders,” Camara said. “Moving forward to allow private insurance companies to sell flood insurance in a competitive market is definitely a major step in the right direction. However, simply shifting the risk from the federal program, which is $25 billion in debt, to the state, would have been a step back.”

R Street’s November 2013 report, “A state approach to flood insurance reform in Florida,” can be found here:


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