News items from the Florida Association of Home Builders:
Title Insurance
The Florida Office of Insurance Regulation recently announced the completion of a multi-faceted review of title insurance regulation in the state.
OIR said it would use the information from the study to begin a full review of title insurance rates charged in Florida.
The 2006 Legislature funded both the title insurance study and the review of premiums charged for title insurance and related services.
“We have to make sure Floridians are charged premiums that are an accurate reflection of risk in addition to what is being charged for related title services,” said Insurance Commissioner Kevin McCarty. “We will combine the data from this study with an analysis of what consumers are presently paying for coverage to set fair and accurate rates for this industry going forward.”
The study found that the Florida title insurance industry is overwhelmingly dominated by five firms. It found that the loss ratios for the coverage are low relative to other states and that Floridians are paying more for comparable title insurance than consumers in other states. In fact, in some example premiums in Florida were 136 percent higher than premiums in other states.
The study recommends tying premium rates to loss ratios thereby making the rates a reflection of the actual risks born by the insurer. Title insurance premiums totaled $15.5 billion in 2004. A copy of A Preliminary Examination of Title Insurance Regulation, Pricing and Costs Structures can be obtained at http://www.floir.com/pdf/FLTitleInsMkt.pdf.
Insurance Pool
Govenor Jeb Bush is considering a state-run reinsurance pool or joint underwriting pool to help businesses that can’t get policies from private insurers, saying that if companies can’t get coverage, it could lead to an economic downturn, newspapers reported.
Last month, Bush said he envisions a program that would offer reinsurance to back up private insurance companies, rather than a program that would sell insurance directly to businesses. Reinsurance is coverage that insurers have to protect against their own losses from paying claims.
Bush said he has asked Insurance Commissioner Kevin McCarty to bring a plan for a state business insurance pool to this week’s meeting of the Cabinet. Bush’s proposal came after Senate President Tom Lee and Chief Financial Officer Tom Gallagher suggested resurrecting such a pool, known as the Commercial Joint Underwriting Association.
Housing Recovery Plan
Housing and Urban Development Secretary Alphonso Jackson last month announced he is approving an $82.9 million plan to support the State of Florida’s long-term recovery efforts following Hurricane Wilma.
The funding is provided through HUD’s Community Development Block Grant Program and will focus on helping counties and Indian tribes throughout southern Florida to restore their affordable housing stock.
The funding is part of $11.5 billion in CDBG assistance Jackson allocated to Florida and four other Gulf Coast states in January to support the region’s long-term recovery. Lt. Governor Toni Jennings, who participated with Jackson in the funding announcement, said Florida will continue to move recovery funds quickly into the hands of the hardest hit communities.
“Disaster recovery is a challenging process, and we are committed to working with local leaders to ensure our communities are rebuilt stronger and more resistant to future damage,” Jennings said.
Florida’s 2005 Disaster Recovery Initiative Action Plan primarily seeks to restore affordable housing that was damaged or destroyed in the wake of Hurricane Wilma. Local county governments and Indian tribes that receive grants through this program are required to devote at least 70 percent of their funding toward restoring affordable housing.
Eligible housing projects may include rehabilitation, relocation, demolition and replacement, and new construction of affordable housing.