Summary
Too much government interference and dictation has put a massive, Florida employing company in such a frame of mind that it will probably leave Florida even if Tallahassee changes it's tenor.
Analysis
When a carrier asks for rate increases, it does so for good reasons- actuarial reasons.
When a catastrophe occurs, it takes a lot of money to pay for it. If the carrier were allowed to charge the rates determined by it's actuaries over the years, then the carrier would have it's own reserves to pay for these disasters without having to tap into other sources of capital, meaning state funds. Florida, for some time now has faced great deficits in its CAT Fund and that condition is not improving - FEMA's coffers are stressed as well.
The key to the thing is to do as the article suggests, let carriers charge what they will and let consumers pick the carrier that has the price and the coverages they desire.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
