News & Updates


2014 Saw Significant Property and Casualty Issues

2014 Saw Significant Property and Casualty Issues

As 2014 comes to a close, several of the issues that commanded considerable attention during the year reached their resolution and set the framework for 2015 ahead.  When we all return from the holidays, the legislative committee weeks will be upon us and the 2015 legislative session will begin before we know it.  However, before we turn the last page on 2014, we can look back at some of the year’s significant events and milestones in the property and casualty arena.

Financial Services Commission Remains Unchanged–  In an election year, the most prevalent topic of conversation is which candidates will win various races.  This was particularly the case in 2014 when incumbent Republican Governor Rick Scott squared off against Charlie Crist, who immediately preceded him in office.  Crist completed the transition from Republican to independent to Democrat but fell short in his race against Scott.  CFO Jeff Atwater, Attorney General Pam Bondi and Commissioner of Agriculture Adam Putnam all return, meaning the four-member body that comprises Florida’s Financial Services Commission remains intact.  Capital markets, including the insurance industry, typically favor predictability and stability, so continuity in the Financial Services Commission is most conducive to continued availability of private market insurance options.

Citizens Property Insurance Corporation Continues to Shrink–  Several market factors combined in 2014 to produce a continued resurgence in the private insurance market and a commensurate reduction in policies insured by Citizens Property Insurance Corporation.  The decrease in Citizens’ policy count can be atributed not only to new entrants to the market but also to increased writings among existing market participants.  Whereas Citizens once insured more than 1.4 million Floridians, it more recently is insuring about half that many.

Morales Decision Upholds Key Aspects of Workers’ Compensation Law–  The Florida Supreme Court issued its decision in the Morales case late this year, affirming the operation of important parts of Florida’s workers’ compensation laws.  For a summary of the case, please see our latest edition of the Florida Insurance Report.  Simply stated, the Supreme Court determined that the estate of an deceased worker could not subsequently maintain an action against the employer for simple negligence when the insurer had previously fully paid the workers’ compensation claim and the parties entered into a release in connection with the workers’ compensation settlement.  Any decision to the contrary would have introduced considerable uncertainty into the workers’ compensation insurance market.

Legislation Gives OIR Necessary Tools to Meet Accreditation Standards–  The Florida Office of Insurance Regulation achieved perhaps its highest legislative priority when the Florida legislature passed a bill in 2014 providing for, among other things, principles-based reserving and enterprise risk reporting.  Property and casualty insurers should take note of the new enterprise risk report that will be due by April 1, 2015.  Acquiring parties also will see that the acquisition filing threshold has increased from five percent to ten percent, and the OIR gains authority to monitor divestitures of controlling interests.

First Event Fully Funded for Florida Hurricane Catastrophe Fund–  The recent string of storm-free years has allowed the Florida Hurricane Catastrophe Fund to amass substantial claims-paying resources.  The FHCF anticipates being able to fully fund an initial event.  Continued growth in the FHCF’s resources will put it in a better position to meet its potential obligations in a subsequent season, when the FHCF can be expected to play an important role in the market as private market reinsurance costs likely would reverse their recent downward pricing trend.