>>Welcome back.
Homeowners insurance rates are going up
on average of 30% a year.
More and more carriers are either going bankrupt,
or leaving the state completely.
And yet the legislature did nothing this year
to address the problem.
And this issue doesn't just affect homeowners.
If you rent, I guarantee you one of the reasons
why rents are going up
is because the owner is having to pay more for insurance.
So this is an issue that affects everyone.
State Representative Tom Fabricio
is one of the few house members
who recognizes the urgency of the problem.
An attorney who specializes in insurance,
I spoke to him about whether or not we are in a crisis.
>>You know, I can't imagine anybody
who would say that this is not a crisis.
>>Well, one person I would say
who doesn't think it's a crisis is the house speaker,
who said that he isn't interested
in having a special session
on what's happening with homeowners insurance.
Have you tried to convey to Speaker Sprowls
that there needs to be something done and done now?
>>Well, if you go back to the video for,
and I forget the exact date,
it was towards the end of session,
I spoke on the floor on the House bill
with regard to homeowner's insurance issues
that went through the committee process
and made it onto the floor.
And we had been talking about the fact very openly
that number one there is a crisis.
That the part of the solution,
there are a lot of things,
different things that can be done to address the crisis.
One of them being expanding the CAT fund,
another one doing some tort reform,
and another one considering whether we should allow
some of the surplus lines carriers
to write homeowners homeowners insurance in Florida.
You know, this has been something
that's been broadly discussed last year in 2021.
Not the legislative session that we just finished this year,
but the the prior legislative session.
We passed Senate Bill 76,
which addressed a lot of issues.
And we expect still that it will take
fruition at some point,
God willing within the next next 12 to 18 months.
And at that point, some of the solutions that we need
will come into play.
However, the problem that we're facing
has to do with the fact that in the meantime,
we have insurance carriers going insolvent.
To compound the problem
that insurance carriers are going insolvent,
other carriers are deciding to leave the state of Florida
according to something I read,
one of the articles that I read recently.
So, you know, you have Citizens, it's growing.
Citizens is at what I last saw was somewhere
in the 800,000 policy range at this point.
So it's steaming towards a million policies.
We have a potential of another-
>>Let me just hold you there for a second
because just so everyone understands,
you know, Citizens are supposed to be
the insurer of last resort.
Two years ago I think it was around 400,000 policies,
which is a lot of people, but it's a better sign.
It means that people were able to find
insurance from other carriers.
Now, as you pointed out, it's over 800,000
and it's projected to have
more than a million policy holders by the end of the year.
What that signifies, correct me if I'm wrong,
is that people are having to go to Citizens
because other insurance carriers are either going bankrupt,
or are leaving the state.
So the fact that Citizens is growing is not a good sign.
It's the exact opposite.
It shows that there's a real problem.
Am I summarizing it correctly?
>>Yeah, that's right.
That's right.
So with the insurance insolvencies
that have occurred this year so far,
the two have been one was St. John's
and the other one was Avatar.
St. John's, the policies, I think it was close
to 170,000 policies at St. John's.
Those were actually taken up by a new carrier, Slide.
The fact that they were there
and able to take those policies
is a feather in the cap of I would say David Altmaier
and several others who are able to make that happen,
and avert the state of Florida having more citizens,
which is the state of Florida
having to take on those policies.
>>David Altmaier, just again,
people who are not well versed in this.
So let's try to keep it on a level people understand.
David Altmaier is the head
of the Office of Insurance Regulation.
You said something earlier about a bill
that you spoke on on the House floor.
What happened to that bill?
It didn't go anywhere, did it?
>>Well, so it's not fair to say it didn't go anywhere.
First-
>>Was it passed?
Did the bill pass?
>>It moved through the committee process and it passed,
but the Florida House passed the bill.
Absolutely.
But in the back and forth between the House and the Senate,
ultimately it didn't make it across.
>>Okay, so that's my point is if we...
And I'm not blaming you.
I mean, you clearly are saying
you recognize that there's a crisis.
If there's a crisis, why didn't the legislature
act this year on it?
>>The Florida house acted.
We had a very good bill which was not a panacea,
but there was a difference
between the House bill and the Senate bill.
And those differences got held up,
and ultimately the House of Representatives bill
didn't make it across the Senate.
But I expect that at some point,
we will have a special session on this issue.
I don't know if it's gonna be the special session
that's been called for mid to late April,
but I expect that at some point
we would have a special session
to deal with some of these issues.
>>Explain what the CAT fund is and how raising
or lowering the access to the CAT fund would be...
'Cause it's right now as I understand it,
that reserve fund that's there
has a great deal of money into it,
in which if you're able to adjust
when insurance carriers can tap into it,
that it would potentially lower rates.
Am I correct in explaining it that way?
>>Well, it potentially lower rates of reinsurance,
and reinsurance is the insurance
that insurance carriers buy to mitigate their risk.
This would be an emergency step measure taken
to be able to number one,
be able to help some of the carriers
that are currently on the bubble for going insolvent
to have them not go insolvent.
So to have those load of policies
that could be shifted to the state of Florida
because of those carriers going insolvent,
have them stay with their current carriers
and let them, you know, stay healthy for at least
for the year for the time being.
That's one of the potential solutions.
>>So was that part of the bill
that the House and the Senate,
did either party in the House or the Senate suggest that
in this current legislative session
that just wrapped up a few weeks ago?
>>It was certainly one of the topics
that was being discussed heavily.
>>But it wasn't in the bill itself.
>>It was not in the final bill.
>>Okay, so that's one thing that could be done
that isn't currently being done
that could be included in a special session.
Do you have a sense for
if they were to adjust access to the catastrophic fund
for reinsurance for homeowners insurance carriers like mine,
what kind of an effect would that have
on rates do you believe?
Have you seen any information as to how much
it would lower rates?
'Cause currently rates are going up
at a rate of 30% a year for homeowners insurance.
Would it stall that?
Would it bring it down?
What would it do to rates if the legislature
did enact access to that CAT fund?
>>Well, that would...
If the legislature took action
with regards to the CAT fund and expanded it,
and in my recommendation
it would be for a limited period of time
while the market corrects itself,
it would bring stability to the market.
As you know, and I see from your questions
you obviously have studied
and taken time to look into this issue,
it's a highly complicated issue.
And the issue with the CAT fund,
it would bring stability to the insurance market
so more carriers don't go insolvent.
The reason why you don't want more carriers
to go insolvent is because we don't want more policies
having to go into citizens,
and therefore putting more of the brunt of the risk
that could occur if a big storm hits.
We don't want all that risk to be on one
or the state of Florida.
We want it to be diversified.
So we want multiple carriers.
We want more carriers in the state of Florida.
We want competition amongst the carriers
so that those carriers are competing for your premium.
And we wanna be able to have a situation
where we have a balanced market.
So premiums aren't drastically rising every year
because litigation is on the rise,
because reserve costs are on the rise,
because inflation is causing property value.
Inflation is causing actual cost of construction to go up,
which is a factor in what claims valuation comes up with.
Because if it costs more money to fix your home
or to rebuild your home, the claim's gonna be more valuable.
So all of these things are part of
what's going on right now
where we find ourselves in this perfect storm.
>>Did the legislature fail
when it came to homeowner's insurance?
>>The legislature didn't get to pass
the legislation we wanted to pass.
Unfortunately, even that bill that we were looking to pass
while it had a lot of very important things in it,
it wasn't gonna be the silver bullet.
So I think we're gonna have to come back at some point.
It's my recommendation that we look to come back,
and we address and, you know,
the three points that I've been talking about
I think are critically important.
And I think these are the things
that the state has to consider deeply.
I think there are other ideas floating out there
other than my ideas,
and we certainly need to get
all the right people in the room
to come up with the right solution.
>>So again, I come back to Speaker Sprowls,
who I watched as he spoke after Sine Die
when the session came to an end.
And he was asked repeatedly, you know,
should there a special session on homeowners insurance?
And he repeatedly said, he did not believe it was necessary.
He said he wanted to just sort of see
how things played out over the next year
with the bill that they did,
the Senate bill that you referred to
that you passed over a year and a half ago.
Let that sort of go into effect and then see.
But the frustration for homeowners is that
while Speaker Sprowls just wants to take
a wait and see attitude,
homeowners are seeing their insurance rates rise,
carriers go out of business, and they're left stranded.
So, you know, I appreciate everything you're saying,
but how do you get your speaker to move off his position
and actually do something?
>>Well, we keep working on the issue
and certainly we're not done yet.
So I expect that there's more to come
before it's all over this calendar year.