McCarty & Petrelli weigh-in
For those of you that follow Florida’s legislative activity, you will recall our weekly legislative updates from March to May 2025 and how incredibly contentious the relationship was between the Governor’s office and the Florida House regarding a slew of issues, as session dragged on for months longer than usual. While we are hopeful tensions will calm, the prevailing wisdom is that the bickering will carry over into the 2026 session convening in January. Pre-session legislative committee meetings begin early next month.
We expect most issues from the 2025 legislative session to resurface in January. Inquiring minds will want to know, what are those issues?
– Repeal of Personal Injury Protection (PIP) auto insurance coverage: Data has shown that if PIP is repealed and replaced with bodily injury liability coverage, rates will increase. When this was tried in 2021, Governor DeSantis vetoed the bill, citing the rate increase potential. Supporters of the repeal said it is the right thing to do, while opponents said every car accident will be a lawsuit.
– Accuracy in Damages and Attorney fees: In 2023, the legislature spelled out in the law clear guidelines so that all parties know true claimant damages and the law also repealed one-way attorney fees. Attempts continue to reverse these good public policy decisions.
– Use of Artificial Intelligence: The legislature attempted in 2025 to regulate insurance companies’ use of AI. The bill was broad (and it didn’t pass) and would have subjected those in the claims process to public safety concerns in light of the United Healthcare assassination.
– Insurance Company Oversight: We anticipate continued legislative discussions around insurance company affiliate oversight. With the advent of the recent holding company rule changes (workshops we just wrote about in our Property Insurance News this edition), these changes may ameliorate a legislative push for law changes.
Other 2026 issues most likely will be third-party litigation financing and a continued push for funding the My Safe Florida Home Program. We are so pleased to see former state Senator Jay Collins as Florida’s new lieutenant governor and hope to see him back in halls of the legislature during the upcoming session moving many of the important issues the governor has continued to champion.
Kevin McCarty, Former Florida Insurance Commissioner; Manager & Founding Member, Celtic Global Consulting
In my recent Florida Insurance Roundup podcast, How Secure is Florida’s Property Insurance Market?, I asked former longtime Florida Insurance Commissioner Kevin McCarty and Demotech President Joe Petrelli what they would advise lawmakers to do or not do concerning Florida’s property insurance market, at a time when some are pushing for reversing many of the 2022 and 2023 reforms, (reforms that McCarty “applauded” and Petrelli said remain “critical”).
“I think what the investment market wants to see is consistency and certainty, and so the less tinkering, I think, the more confidence,” advised McCarty to Florida legislators. But he would like to see changes to the Florida Hurricane Catastrophe Fund to make reinsurance even more available and affordable for insurance companies. “I think the most underutilized tool that we obtained after Hurricane Andrew was the Cat Fund, and it has been modified over the years to reflect changes in the marketplace. But I think it can be used in a much more robust capacity, particularly with our small domestic market, to help bring down pricing by increasing that capacity,” said McCarty. He noted that the Cat Fund’s capacity of $17 billion has remained unchanged since its creation, as total insured values in Florida have greatly risen.
Joe Petrelli, President, Demotoch
“The thing that I would caution not just Florida’s legislature, but every legislature that looks at property insurance or any kind of material damage insurance, is not to promise rate decreases but rather promise stabilization of rate changes,” answered Petrelli. He cited ever-rising costs of material and labor in making claim damage repairs, which keep upward pressure on insurance rates. “Don’t promise rate decreases, because that may be a promise that can’t be kept.”
Our discussion focused on the July article in the Wall Street Journal suggesting that Florida’s property insurance market is inherently flawed and financially shaky, under the review of Demotech. It cited the 12 insurance company insolvencies between 2019 and 2023 in a market painted as over-reliant on reinsurance. We tackled all those issues on the podcast, including the confusion between rate and premium, and the real reasons behind those insolvencies.
Our conversation goes to the heart of just how secure our insurance market is, and serves as a lesson on how property insurance works in the Sunshine State. You can listen and read more about it here.
Six weeks of scheduled legislative committee meetings begin on October 6, where some bills will have their first hearing. We look forward to reporting on the legislature’s direction on these and other issues that arise.
LMA Newsletter of 9-8-25
