News & Updates


Senate Select Committee Completes Round One

By: David Yon

On February 4 and 5, the Senate Select Committee on Property Insurance Accountability heard testimony from the Office of Insurance Regulation and five insurers, Allstate, Nationwide, Florida Farm Bureau, Hartford, and American Strategic. The Co-Chairs of the Committee are Senators Atwater and Geller. The purpose of the Committee was to take testimony, under oath, from property and casualty company executives “about their pricing practices and their increased profits associated with escalating rates.” At the hearings, the Committee inquired from each company about the following areas:

  • Claims history
  • Premiums history
  • Rate-Filing history
  • Presumed factor and “true-up” calculations
  • Hurricane and other modeling
  • Risk calculations
  • Reinsurance coverage levels and contracts and apportionment of reinsurance costs to Florida; and
  • Profitability and profit-and-contingency factoring

At the conclusion of the first hearing, the Committee indicated it might pursue legislation to reduce the state’s direct exposure to the hurricane risk, limit insurers’ opportunities to use models not found acceptable by the Florida Commission on Hurricane Loss Projection Methodology and permanently repeal arbitration. The Committee has scheduled a follow-up meting on February 19. It expects to hear from Paul Walther, of Reinsurance Directions, Inc. There are also presentations and testimony on hurricane loss modeling on the agenda from the Florida Hurricane Loss Methodology Commission and AIR Worldwide Corporation. The 2008 regular Florida Legislative Session starts March 4.