Insurance Commissioner Michael Yaworsky is urging Florida legislators to hold off on new reforms to the state’s property insurance sector until a thorough analysis of recent changes can be conducted. Recent legislative reforms aimed at addressing the long-troubled property insurance market in Florida appear to be having a positive impact, as observed by industry officials.
Virginia Christy, the deputy commissioner of property and casualty at the Florida Office of Insurance Regulation, highlighted key developments at the Florida Chamber Annual Insurance Summit in Orlando. According to Christy, the legislative changes made in 2022 and 2023 have significantly reduced litigation, leading to renewed profitability for private insurance companies that had been suffering five consecutive years of underwriting losses.
Christy also pointed out that the financial stability gained has attracted support from reinsurers and the catastrophe bond market at lower rates, fostering a more competitive environment with new companies entering the market. This has contributed to stabilizing or lowering premiums for homeowners.
Commissioner Yaworsky does not support additional legislative reforms at this juncture, emphasizing the importance of allowing the current measures to take full effect. Christy reiterated Yaworsky’s position, noting the need to avoid any adjustments that could derail the progress already made. Legislation regarding property insurance remains minimal, with few related bills introduced so far.
There’s an anticipation amongst industry leaders that the data on claims post recent hurricanes, such as Helene and Milton, will affirm the sustainable impact of the reforms. The objective is to establish whether these changes have set the industry on a path to long-term stability. Christy underscored Yaworsky’s advisory to the Legislature regarding the necessity of time to fully gauge the reforms’ outcomes—a process that could take up to eighteen months.
The reforms in question include prohibiting contractors from demanding the transfer of claims benefits, restricting attorneys’ ability to collect fees from insurers in successful lawsuits, limiting the filing of bad faith lawsuits against insurers, and barring roofing companies from offering inspection incentives. These measures also tightened eligibility criteria for coverage through Citizens Property Insurance Corp.
Significantly, the past year witnessed national insurers like State Farm Florida, Progressive, and USAA reasserting their presence in the Florida market. Some firms have resumed writing policies in regions previously deemed high-risk and uninsured.
Further, new reciprocal insurers and a notable trend of insurers filing for rate reductions or maintaining stable rates were observed. A reduction in rate increase filings—from an average of 7% last year to 1.6%—was reported alongside a decline in Citizens Property Insurance Corp.’s policy count below one million for the first time since 2022, driven by efforts to depopulate and transfer policies to private insurers.
The renewed optimism has encouraged reinsurers to lower costs, which experts believe will help continue the trend of reducing homeowner premiums. Industry executives, like Don Matz of Orange Insurance Exchange, cite the significant role of reforms in their operational decisions.
Hurricane-related claims showed a decrease in litigation involvement, as noted by Justin O’Keefe of Renaissance Re. The company observed fewer homeowners represented by public adjusters or attorneys compared to prior storm events, suggesting reforms are affecting claim processing dynamics.
Despite such positive indicators, critics argue that homeowners have yet to experience reduced premiums and might face challenges in legal pursuits. State Senator Blaise Ingoglia emphasized that while legislative actions have targeted market abuse, pressures on consumers from various economic factors persist.
The Florida insurance market is cautiously optimistic, as recent reforms appear to be stabilizing the industry’s landscape. While Commissioner Yaworsky advocates for a pause on further changes, the coming months will reveal whether current measures effectively foster long-term market stability and reduced premiums for homeowners.
Source: FloridaRealtors
