2012 hurricane insurance update recharged “partners in recovery,” - fepa mid-year work session-...

2012 Hurricane Insurance Update Recharged “Partners in Recovery,”

- FEPA Mid-Year Work Session-

Sam MillerFlorida Insurance CouncilExecutive Vice President

July 18, 2012

Insurance Positives Since Last Hurricane Landfall – Wilma, 2005

• Florida Hurricane Catastrophe Fund in best financial shape ever

• Citizens also with great liquidity, $19.5 B

• Six years without a hurricane allowed cash to accumulate

Insurance Positives Since Wilma, 2005

• Cat Fund - $8.6 B in cash • Possible pre-hurricane financing program –

bonds,  other possibilities.

Insurance Positives Since Wilma, 2005

• Citizens’ 2012 claims-paying ability: $19.5 B in total, maybe the most ever.

• $5B in pre-event liquidity (this must be repaid)• $1.5 B in private reinsurance (a landmark

development)• $6.9 B from the Cat Fund

• Six years without a hurricane allowed cash to accumulate

Insurance Positives Since Wilma, 2005

• Congress Extends for 6 Years National Flood Insurance Program – which covers storm surge and flooding.

• Rates will go up.

Insurance Positives Since Wilma, 2005

• Key Reforms in SB 408 from 2011 session.• Three-year limit on hurricane claims.• Installment payments on roof installation, other

repairs.• Controls on public adjusters.

Insurance Negatives Entering 2012

• Potential $1.8 B shortfall in Cat Fund• Assessments from Cat Fund & Citizens

Insurance Negatives Entering 2012

• Citizens still growing and competing with private insurers.

• Florida Supreme Court ruling striking public adjuster’s solicitation ban.

Florida’s Three-Legged Stool

• Emergency Management Community/State Division of Emergency Management/Florida Emergency Preparedness Association

• Office of Insurance Regulation• Department of Financial Services

• Florida Insurance Council, Insurance Information Institute, and Florida Association of Insurance Agents and other agents groups

Partners in Recovery: Key Elements

Partners In Recovery

• Personal claims – key emergency management personnel

• Assistance and expedited handling

2012 Hurricane Insurance Update Recharged “Partners in Recovery,”

- FEPA Mid-Year Work Session-

Sam MillerFlorida Insurance CouncilExecutive Vice President

July 18, 2012