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This Federal Legislation Will Hurt Floridians

By: Tom Feeney | Posted: July 27, 2012 9:29 AM

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Tom Feeney

While Citizens Property Insurance Corp. continues to be a topic of interest for Floridians across the state, including how policyholders in certain areas will be able to afford potential, future rate hikes, some members of Congress have proposed federal legislation that is also cause for concern.

Rep. Richard Neal, D-Mass., and Sen. Robert Menendez, D-N.J., are working together on HR 3157 and S 1963, which aim to levy costly tariffs on global insurance companies.

These global insurance companies, which provide nearly two-thirds of all re-insurance in the United States, help spread insurance risk throughout the world and are essential to the livelihood and well-being of consumers and businesses affected by natural disasters such as hurricanes.

Living in a hurricane-prone state that is dealing with its own insurance dilemma, the return of a healthy, private market relies heavily on private insurance and re-insurance companies. The business community realizes the need to spread our state’s risk globally instead of concentrating it within the state, and a tax increase which will be passed on to all Floridians is nothing more than a step back for Florida.

In 2010, a study conducted by the Brattle Group found that as a result of this legislation, the price of insurance in this country would increase by as much as 9 percent on some lines of business. In Florida alone, the study projected that some businesses could see their insurance bills radically increase with the price of commercial multiperil insurance soaring by 12.6 percent – which is a staggering $264 million a year in added costs for Florida businesses.

On behalf of the Associated Industries of Florida, I urge you to contact your members of Congress and urge them to vote against HR 3157 and S 1963. This legislation is the last thing Florida needs at a time when we are trying to revitalize the private insurance market and reduce the size of the overrun state insurer of last resort.

Thomas C. Feeney, III is president of Associated Industries of Florida.

Tags: News, Columns

Comments (4)

newers

5:10AM JUL 30TH 2012

The simple answer to the rip-off of Floridians by the insurance companies and the state government is to move. I did and my homeowner's insurance is now about 15 percent of what I was paying in Florida. As a bonus, my auto insurance is less than half what I was paying in Florida. I'm saving over $3000 per year just on insurance.

Reggie

11:06AM JUL 28TH 2012

Franklin Thompson

9:15AM JUL 28TH 2012

The facts [are] that if taxes are raised on reinsurers, the insurers who buy that reinsurance have to pass the cost onto us, their policyholders. It's really pretty simple.

Frank

10:36AM JUL 27TH 2012

Interesting . . . . this article seems very reminiscent of a March 2012 article by Alex Sink saying virtually the same thing, with virtually the same facts, quoting the same study.

Who would've thunk that!

What's further interesting is that others have indicated that the legislation is more about "closing a tax loophole that benefits insurers based offshore."

It'd be interesting to hear both sides, and understand where the real facts lie.