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Learn extra: Multi-state insurance coverage firm goes bust
To pay these claims, FIGA has approved insurers to gather assessments for insurance policies written or renewed this 12 months. Late final month, FIGA board of administrators accepted a 1.3% evaluation on the premium price of all insurance policies bought in Florida; the evaluation impacts all insurance policies, from owners; to crop insurance coverage; non-public flood; inland marine; plane; boiler & equipment; product legal responsibility; and even medical malpractice.
South Florida Solar Sentinel reported that that is the second evaluation levied by FIGA in lower than six months. It had beforehand accepted a 0.07% evaluation to cowl the legacy prices of insurers Gulfstream Insurance coverage and American Capital Assurance, which have additionally gone underneath.
Learn extra: Gulfstream Property & Casualty’s liquidation forces 33,000 policyholders to search out various cowl
Business specialists have identified that the state of affairs is simply going to worsen as extra insurers working in Florida start to financially battle.
“On the finish of the day, if an organization goes to go bancrupt, no matter who picks them up, prices need to be paid,” mentioned Paul Handerhan, president of the Fort Lauderdale, FL-based Federal Affiliation for Insurance coverage Reform. “All of these legacy claims nonetheless need to go to FIGA.”
Handerhan defined that insurance coverage executives are anticipating that some firms can be unable to boost sufficient capital this 12 months to buy reinsurance earlier than the June 01 deadline, which coincides with the beginning of the hurricane season. He additionally famous that some insurers have even bought reinsurance from as many as 20 reinsurers.
It’s feared that much more insurers may go underneath within the close to future, and thus extra FIGA assessments that elevate insurance coverage prices for all.
“What’s going to occur when the subsequent firm goes into liquidation? The story isn’t over. There’s extra to come back,” Safety First Insurance coverage founder and CEO Locke Burt advised South Florida Solar Sentinel.
Burt has urged that the present sorry state of Florida’s insurance coverage business is as a result of state legislature’s failure to cross significant reforms that might tackle the difficulty of predatory restore contractors and attorneys.
Learn extra: Florida regulator approves almost 100 insurance coverage charge will increase
South Florida Solar Sentinel reported that one other insurer will quickly be positioned into receivership; Avatar Property & Casualty, which had 38,282 residential and business insurance policies in This autumn 2021 and misplaced its Demotech monetary stability ranking earlier this 12 months. Final week, Florida’s Division of Monetary Providers requested Leon County’s circuit court docket for authority to supervise the insurer’s liquidation.
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