TALLAHASSEE, Fla. – October 27, 2015 – (RealEstateRama) — Chief Financial Officer Jeff Atwater knows that Florida’s homeowners carry insurance to protect their property in the event of an emergency, natural or otherwise. Floridians have seen the costly destruction hurricanes can cause as well the financial volatility that storms can create in the property insurance market. Each year, the Office of Insurance Regulation tests the financial soundness of property insurance companies that conduct business in the state of Florida to ensure they can withstand the catastrophic losses generally associated with major storms. However, in an effort to bolster consumer confidence levels, CFO Atwater asked Florida Insurance Commissioner Kevin McCarty to strengthen the financial ‘stress tests’ these companies are put through and to share the results with Florida’s policyholders.
“Companies large and small go through annual financial tests to make sure they are well-managed and able to deliver and remain viable when the next hurricane hits Florida’s shores, but the results have not been made public in a way that’s meaningful to the consumer,” said CFO Atwater. “Consumers deserve to have confidence in their carrier, and we’ll continue to share information that shows the processes that are undertaken to test their financial strength. I appreciate Commissioner McCarty’s efforts to create a more robust test as well as his efforts to share the information with policyholders and the industry. I look forward to continue working together to create an even better test next year.”
The stress test involves examining each of the participating property insurance company’s ability to respond to the impact of historical storm scenarios. In order to pass the test, companies must a carry post-event surplus greater than a minimum set in Florida law. Arriving at the required post-event surplus is a combination of an insurance company’s existing surplus as well as the reinsurance program the company has in place to protect that surplus amount.
This year, three historical storm scenarios were used: the 1947 Fort Lauderdale hurricane, the 1921 Tampa Bay hurricane, and the four hurricanes of 2004, Hurricanes Charley, Frances, Ivan and Jeanne. During the 2015 season, each of the 67 participating companies ultimately passed the test.
To view the full report, visit OIR’s website here. For consumer assistance regarding insurance-related matters to include this report, call the Department’s Insurance Helpline at 1-877-693-5236.
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Chief Financial Officer Jeff Atwater, a statewide elected official, oversees the Department of Financial Services. CFO Atwater’s priorities include fighting financial fraud, abuse and waste in government, reducing government spending and regulatory burdens that chase away businesses, and providing transparency and accountability in spending. Follow the activities of the Department on Facebook (FLDFS) and Twitter (@FLDFS).
Contact: Ashley Carr
(850) 413 – 2842