As hurricane season begins, the Florida P&C crisis gets worse.

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As the hurricane season of 2022 approaches, three Florida insurers have already been deemed insolvent this year for failing to get full reinsurance.

 

Mark Friedlander, director of communications for Triple-I, asserts that a catastrophic failure of Florida insurers is possible.

Friedlander believes that the $2 billion reinsurance fund established by the legislation Gov. Ron DeSantis signed into law at the end of May is not nearly enough and that due to the market’s high volume of property claims and litigation, private reinsurers are leaving it.

 

The sum needed “had to be at least twice as much as the monies that were designated for reinsurance coverage during hurricane season and open to other dangers as well,” according to Friedlander.

 

Recently, Southern Fidelity Insurance Company put a halt on writing new business and processing renewals in Florida while it obtained enough reinsurance for hurricane season, prompting the insurance rating agency Demotech to revoke its financial stability rating for the company.

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The OIR instructed the Tallahassee, Florida-based insurer to “wind down operations” after it failed to comply by the start of the season on June 1. This indicated that the business would fail, joining St. Johns, Avatar, and Lighthouse as the fourth Florida residential insurers to do so this year.

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