Florida is known for its unique level of hurricane exposure, with the majority of its residents making their homes in over 30 counties collectively containing more than 1,000 miles of coastline. After a decade-long and unprecedented lucky streak, the state has now been affected by three major hurricanes in three straight years. Less well-known are some quirky aspects of its political structure that directly influence not only property and flood insurance regulation, but also Florida’s one-of-a-kind government presence within the market.
The public servants who interact most frequently with U.S. insurers are state insurance commissioners. These chief regulators are usually either directly elected or appointed by the state’s governor. But Florida has a “Cabinet” system of government. There are four statewide elected officials—the governor, the chief financial officer, attorney general, and agriculture commissioner—who sit as the Financial Services Commission (FSC), which appoints or removes the commissioner of the Office of Insurance Regulation (OIR), as well as approves all administrative regulations or “rules.” Insurers operating in Florida are often advised to monitor the activities of the FSC as a whole and the viewpoints of each member.
The state also has a mandatory government-run property catastrophe reinsurance program, the Florida Hurricane Catastrophe Fund, and a body that regulates the use of catastrophe models in rate filings, the Florida Commission on the Hurricane Loss Projection Methodology.
To learn more about insurance governance and its challenges in Florida, one of the world’s riskiest catastrophe zones, read the article “Political winds in a peak hurricane state” by Milliman actuary John Rollins.