Florida Banking July 2023

• Establishes the Florida Optional Reinsurance Assistance Program which allows Florida insurers to purchase reinsurance at near/reasonable market rates; • Establishes additional regulatory provisions to make certain that insurers resolve claims and pay those claims faster; • Provides new provisions to limit policyholders from entering Citizen’s Insurance Company, including a requirement to remove policies where renewals or take out offers are within 20% of the Citizen’s premium. Sending the Right Signals Even with these significant legislative reforms completed, it is unreasonable to expect immediate change in the form of lower premiums for customers and more significant availability for bankers to close loans. We did not get into this crisis overnight and we won’t fully heal the market overnight either. However, what is most important regarding these reforms is that our government has begun to send the right signal to both foreign and domestic insurers and reinsurers who have previously been hesitant to enter the Florida property insurance market. That signal is that we are willing to make the tough, but right, choices that will address Florida’s multi-faceted challenges. So far, one new company, established by HCI Group, has recently filed with the Office of Insurance Regulation to begin issuing policies in the Florida market. Keeping a Fresh Perspective

knowledgeable agents who know the most about the market and have access to a variety of insurance options for coverage.

Working Together to Find a Solution

The FBA continues to receive emails and phone calls from concerned bankers, and many FBA board and Governmental Relations Council meetings have continued to wrestle with the topic. Recently, one banker suggested that the FBA should consider submitting a property insurance questionnaire to our wide membership group. This questionnaire would request additional information such as how banks are using creative lending options on underinsured properties or if they have found using Probable Maximum Loss studies for underwriting to be helpful. FBA would then compile and summarize the responses and provide creative solutions/best practices in an effort to address these problems as an industry. Coming together as a banking community and using our collective brainpower is an excellent idea and one which the FBA plans on implementing in the coming months. Please be on the lookout for the questionnaire and please help the industry by providing a response! Kenneth Pratt serves as FBA’s Senior Vice President of Governmental Affairs and is the association’s principal lobbyist on issues involving trust and wealth management legislation.

It is also more important than ever for the banking industry to look for new and creative ways to address this crisis. During the 135th Annual Meeting, the FBA hosted a panel discussion on “Florida Property Insurance — Current and Future.” The FBA was pleased to be joined by Florida Insurance Commissioner Michael Yaworksy, Citizens Property Insurance CEO Tim Cerio and Zurich Vice President for Middle Markets Jennifer Harrington, all experts on the topic of property insurance. The panelists painted a sobering picture of the current market but gave bankers some hope that with time, Florida’s insurance crisis could still rebound. The keys to this rebound would be increased insurer competition, decreased reinsurance costs and movement towards depopulating policies out of Citizen’s. While the panelists could offer no single or quick resolution to solve Florida’s crisis, they did encourage the bankers and the rest of the business community to stick together and help to maintain the legislative reforms most recently passed. They also encouraged bankers to revisit insurance agency choices and to seek out the most

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WWW.FLORIDABANKERS.COM JULY 2023 — 19