Suggestions for insurance, future storm recovery
The Governor’s Inauguration, January 3, 2023
The Florida Legislature this past week began the first of six staggered weeks of legislative committee meetings leading to the start of the formal regular 60-day session on March 7. It coincided with Governor DeSantis’ inauguration and address before a crowd of 3,000 on the steps of the old Capitol, marking the start of his second term. It was otherwise a light, two-day week of mostly informational meetings that included the House Select Committee on Hurricane Resiliency & Recovery. Its counterpart, the Senate Select Committee on Resilience, began hearings on Florida’s recovery efforts from Hurricanes Ian & Nicole.
Senate Majority Leader Ben Albritton (R-Bartow), who chairs the committee, remarked on the numerous challenges facing Florida both from past disasters, and those looming in the future with threats from coastal flooding and sea-level rise, together with the ever-present danger that each hurricane season brings.
Kevin Guthrie testifying before the Senate Select Committee on Resiliency
Florida Emergency Management Director Kevin Guthrie briefed the committee on his team’s work in the wake of Hurricane Ian, which represented a 500-year flood event. Guthrie said the Division of Emergency Management is trying to streamline FEMA reimbursements, having already obligated $500 million, with another $1.5 billion being formulated into projects. These additional projects include $450 million for emergency response costs and $833 million for individual assistance programs. Guthrie outlined the Division’s three biggest challenges in the hurricane response effort:
- Debris removal contracts: Guthrie said there is a lack of uniformity across local governments in their inclusion of necessary line items. He recommended the legislature institute a standardized checklist of items to be included in debris removal contracts with local governments.
- Derelict Vessels: Normally the owner of a derelict vessel from a disaster has 45 days to resolve the issue, yet some remain long afterward. Guthrie said that the state is eligible for FEMA reimbursement for removing those vessels. However, he recommended tightening the timeframe for owners to remove the vessel, as 45 days or longer could jeopardize the state’s eligibility for reimbursement.
- Permitting: Guthrie noted that local government permitting programs for demolition, construction, and repair are not always equipped to handle the impacts of a natural disaster that causes mass housing damage. He gave examples of the permitting process in some Southwest Florida jurisdictions causing delays in the disaster recovery process. He suggested there may be ways for lawmakers to create a more coherent, streamlined, statewide process to expedite permitting after a disaster event.
The committee, along with its House counterpart, will continue to gather facts and suggestions for potential future legislation.
So far, just one insurance bill has been filed for this session. HB 57 revises the definition of “motor vehicle liability policy” to include certain policies issued by specified risk retention groups. We’ll have our usual Bill Watch in coming newsletter editions to include relevant insurance and disaster recovery bills.
It is too soon to tell if we will see additional property insurance reforms in the coming weeks. One thing is for certain though…the legislature must do more in the reinsurance arena. The January 1 reinsurance renewal programs were “brutal,” a term used by long time industry veterans. Most of Florida’s property insurance companies will not have the financial resources to absorb the current reinsurance pricing estimates for the June 1 renewals. The solution? Florida policymakers must create a robust reinsurance mechanism to be a shock absorber to the otherwise astronomical increases. Unless the legislature acts, these enormous reinsurance rates will land in consumers’ mailboxes by the end of the year. The goal is for the state to stabilize the cost of reinsurance as we head into 2023 storm season.
The second week of committee meetings will begin a week from tomorrow (January 17). At this writing, they include the Senate Banking and Insurance Committee on January 18 at 10am and another meeting of the Senate Select Committee on Resiliency later that day at 3:30pm. You can watch the meetings on The Florida Channel.
LMA Newsletter of 1-9-23
