You are here:HomeNews CenterInsurance News2007Florida Passes Bill to Prevent National Insurers from Operating Florida-only Subsidiaries

Florida Passes Bill to Prevent National Insurers from Operating Florida-only Subsidiaries

Just before the end of the legislative session, a bill that would prevent national insurers from operating Florida-only subsidiaries has been approved by the Florida...
May 8, 2007

Just before the end of the legislative session, a bill that would prevent national insurers from operating Florida-only subsidiaries has been approved by the Florida House and Senate. The bill, which Gov. Charlie Crist (R) strongly lobbied for, will phase out existing so-called "pup" companies and ban new ones from setting up shop. Under the bill, existing pup companies also would be compelled to include parent company profits in their rate filings. Bob Hartwig, Insurance Information Institute president, said  "What this is doing to Florida is further sealing itself in its own tomb of financial ruin." Insurance analysts have been increasingly concerned over the fate of the Florida market since the state legislature in January approved a bill package increasing the state's liability in picking up the tab for natural disasters by expanding the state catastrophe fund and opening up its last-resort insurer to competition with the private market.

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