The Latin American Association of Insurance Agencies (LAAIA) today urged lawmakers to approve a new mutual incentive provision in Senate Bill 1770, relating to property insurance, that will be voted on in the Appropriations Subcommittee on General Government tomorrow. The provision, if adopted, would allow startup mutual insurance companies to participate in a surplus note program to aid in the depopulation efforts of Citizens Property Insurance Corporation (Citizens).
“It is vital that current Citizens policyholders are given an opportunity to be part of the effort to depopulate Citizens, and the new mutual insurer incentive provision in Senate Bill 1770 is an innovative and commonsense measure to accomplish that goal,” said Tony Martely, president of the LAAIA. “The new mutual insurer incentive proposal, if adopted by the legislature, would aid in relieving Florida’s property insurance availability problem by allowing a significant number of Citizens policyholders the chance to become policyholder-owners of a mutual.”
“In addition to helping in the depopulation efforts of Citizens, the introduction of new mutual insurers into Florida’s property insurance marketplace would benefit the state by reducing Citizens aggregate exposure and current Citizens policyholders by providing them with an alternative insurer,” continued Martely. “The benefits of a mutual are wide-ranging. For instance, because there are no third-party investors in a mutual format, the expenses of the company are roughly two-thirds of the average property insurer. Mutuals also have the ability to offer rate levels that are comparable to Citizens and offer broader coverage than current Citizens policies.”
“For the good of all Florida’s property insurance policyholders, it is time for the legislature to adopt this consumer-friendly policy, and we hope they join us in supporting the new mutual insurer incentive proposal,” concluded Martely.