A decline in reinsurance rates "does not translate into a one-to-one reduction" in homeowners insurance premiums, Florida Insurance Commissioner Kevin McCarty said in a response to state Chief Financial Officer Jeff Atwater. Several insurers have been required to purchase additional reinsurance coverage, which "is likely to keep rate up and move additional premium and exposure to reinsurers," McCarty said. Insurers also have paid higher reinsurance rates to the Florida Hurricane Catastrophe Fund, and they might be implementing staggered rate increases after a state law prevented the industry from raising prices following hurricane activity in 2004 and 2005, McCarty added.

Related Summaries