A.M. Best Insurance Law Podcast Discusses FHCF Reform
I recently recorded a podcast in the latest episode of A.M. Best’s Insurance Law Podcast, a series that examines timely and important legal issues affecting the insurance industry from an attorney’s point of view. In this episode, I discussed the pending proposal by the Florida Hurricane Catastrophe Fund to shrink its size and increase its costs over a multi-year period. The FHCF has proposed this measure to reduce its size to a more conservative level in light of potential concerns with raising enough bonds to meet the full amount of its contractual commitment to participating insurers. As stated by Jack Nicholson of the FHCF, the cat fund wants to be able to say that it can definitely meeting its commitments to insurers rather than that it probably can meet them.
This is certainly a worthy goal, and the desire of insurers who participate in and pay premiums to the FHCF. At the same time, it is important that any public policy initiatives affecting the property and casualty insurance market be view as a whole or else existing problems could be worsened. For example, if a reduction in the size of the FHCF, or an increase in the industry retention, causes the private market’s rate needs to increase while Citizens Property Insurance Corporation’s rate increases remain capped, the proposal could thwart depopulation efforts by causing the state-run Citizens to look relatively more attractive. This would be counter to what policymakers, including Governor Rick Scott, have been advocating recently.
My podcast in the A.M. Best series can be found online at feeds2.feedburner.com/InsuranceLaw. In addition, we feature periodic podcasts on our own website. These can be found in the Insurance Portal, along with other information of interest to the insurance industry.
Founded in 1899, A.M. Best Company is a leading insurance rating and information source. In 2011, the Radey law firm was named to A.M. Best’s list of recommended insurance attorneys.