Fla. governor signs hurricane insurance bill

TALLAHASSEE, Fla.--Florida Gov. Charlie Crist on Thursday signed hurricane insurance legislation into law, ushering in sweeping changes to the state's property/casualty insurance market.

The controversial House Bill 1A--passed by state lawmakers earlier in the week and widely expected to win the governor's stamp of approval--made a series of changes to insurance regulations for Florida residents, including boosting the state's subsidy of insurance rates offered through two state-backed vehicles: the Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund.

Among other things, the new law repeals recently implemented and planned rate increases by Citizens--traditionally known as the state's insurer of last resort--and freezes any further rate increases during 2007. Citizens' rates are no longer required to be noncompetitive with the private market.

The legislation also:

• Increases available capacity of the state catastrophe fund to nearly $33 billion from $16 billion, mandating direct insurers to pass savings on to customers;

• Lifts collateral requirements for non-U.S.-based reinsurers, at the discretion of the Florida Office of Insurance Regulation;

• Requires resolutions of claims by insurers within 90 days;

• Bans "cherry-picking" by primary insurers that previously wrote auto insurance but did not write homeowners policies in Florida.