Florida Governor DeSantis signs bill reducing state property reinsurance funding to $900 million

By Mia MacGregor

July 8 - (The Insurer) - Florida governor Ron DeSantis on June 30 signed legislation significantly reducing the state's financial commitment to its property reinsurance programs.

The bill, HB 5013 – State-funded Property Reinsurance Programs, modifies Florida's existing state-backed reinsurance framework. It cuts the authorized cumulative transfers from the General Revenue Fund to the State Board of Administration's Reinsurance to Assist Policyholders (RAP) program from $2 billion to $900 million.

The RAP program is designed to provide aid to insurance companies recovering from hurricane-related damages.

Additionally, the new law repeals the Florida Optional Reinsurance Assistance (FORA) program entirely.

The legislation took effect immediately upon becoming law, marking a substantial reduction in the state's financial backing for property insurers.

The RAP and FORA programs were introduced in 2022 to provide relief to Florida carriers facing soaring claims costs and increasing reinsurance rates. FORA had been established with a $1 billion allocation.

The Florida insurance market has since stabilized because of the impact of sweeping reforms enacted in 2023.

A Florida Senate summary of the HB 5013 explained: "By reducing the cap for transfers to the RAP program and repealing the FORA program, the bill increases the amount of unallocated General Revenue funds available by $2.1 billion."