Florida Gov. Ron DeSantis and the state’s insurance commissioner have touted the governor’s 2024-2025 state budget, released this week, as a $431 million relief package for Florida homeowners struggling with escalating property insurance premiums.
Insurance industry lobbyists, consultants, professors and think tanks said they were still analyzing the 400-page proposal. But questions have been raised about the impact that the tax relief and lost revenue would have on state regulators and on the Florida Insurance Guaranty Association – and about the real impact that a few hundred dollars in savings would have on homeowners’ pocketbooks.
The plan would waive premium taxes on homeowner policies up to $750,000 in value for one year and permanently on flood insurance policies. That would amount to about $240 for the average homeowner in the state, or about $400 for those with flood insurance, said Mark Friedlander, with the Insurance Information Institute.
“Any savings is good. But realistically, it’s a very small amount,” Friedlander said.
With more reinsurance price hikes expected early next year, premium increases for consumers will likely eat up any savings passed on from the tax and fee relief.
The governor’s budget also would waive the 1% assessment on policies, which goes to the Florida Insurance Guaranty Association to help cover claims left behind by insolvent insurance carriers. The director of FIGA, Corey Neal, said Thursday that he presumes that some of that lost revenue will be replaced by tax dollars from the state’s general fund.
But the loss of the assessment funding won’t have a big impact on FIGA’s resources at this time, he noted. The association in August borrowed $600 million by selling municipal bonds. And it will soon see the recovery of an estimated $150 million in reinsurance coverage that had been purchased by United Property & Casualty Insurance Co. before it was deemed insolvent earlier this year.
About 90% of UPC claims will have been paid by the end of February, Neal said.
The governor’s budget proposal “helps consumers by not having to pay the assessment, so that’s a positive,” Neal said. “I think it’s a good idea. We just need to work with the governor’s office and legislators to figure out the implementation.”
Insurance Commissioner Michael Yaworsky suggested this week that even though the budget plan waives the premium tax, it provides other funding for insurance regulators.
“Governor DeSantis’ budget recommendations demonstrate an ongoing commitment to Florida’s policyholders by providing the Florida Office of Insurance Regulation (OIR) with the necessary resources to regulate one of the most complex insurance markets in the world,” Yaworsky said in a statement.
The budget plan also would set up another $107 million in recurring funding for the popular My Safe Florida Home wind-mitigation program, which provides grants to homeowners who fortify their structures.
A number of other bills that could affect property insurers have been introduced ahead of the 2024 legislative session, which officially begins Jan. 9.
**Article obtained from: Insurance Journal, By: Insurance Journal Staff Reports, Published 12/08/2023
https://www.insurancejournal.com/news/southeast/2023/12/08/751359.htm
