A bill that would allow Florida's state-run Citizens Property Insurance Corp to raise rates by as much as 20% annually has moved a step closer to becoming law after clearing its last state House of Representatives committee stop.
The proposal, carried by Republican Bryan Nelson, is aimed at allowing the insurer to raise rates back up to market levels following a three-year freeze that was designed to help coastal homeowners struggling to pay rising premiums.
The bill, HB 1495, would allow Citizens to start raising rates on homeowners by a state-wide average of 10% next year – or as much as 20% on individual policies.
Meanwhile, Florida has gained support from three other catastrophe-prone states as they bid to finalise legislation this week that would see the federal government underpin up to $80bn of loans received by struggling public insurers in the states.
California, Louisiana and Texas are the other states to push for the legislation although arguably Florida has the most to lose if the bill fails. The state's cat fund, which reinsures Citizens, has a shortfall of approximately $14bn.
The legislation would allow each of the four states to use the power of the Treasury to borrow between $5bn and $20bn from the capital markets. That money would be repaid by applying additional fees, called assessments, on private insurers and policyholders.