Already this year, three insurance companies in Florida have been declared insolvent because they have not managed to get full reinsurance when the hurricane season 2022 ends.
“We have the potential for a massive failure for Florida’s insurance company, probably the worst ever,” said Triple-I Communications Director Mark Friedlander. According to Friedlander, the $ 2 billion reinsurance fund created by the legislation signed by Governor Ron DeSantis in the law at the end of May is not enough, and private reinsurance companies are withdrawing from the market due to its high level of real estate claims and litigation.
“There needed to be at least double the amount of funds allocated for reinsurance cover for the hurricane season and open to other hazards as well,” Friedlander said.
Most recently, the insurance valuation institute Demotech announced that it had withdrawn its rating for financial stability for the Southern Fidelity Insurance Company after the insurance company imposed a moratorium on writing new deals and processing renewals in Florida until it secured enough reinsurance for the hurricane season. When the Tallahassee, Florida-based insurance company failed to do so at the start of the season on June 1, OIR ordered it to “wind up operations,” indicating that the company could become the fourth Florida home insurance company to fail this year, following the liquidation of St. Louis. Johns, Avatar and Lighthouse.