House Bill 4265

    Florida House of Representatives - 1998                HM 4265

        By Representative Safley






  1                          House Memorial

  2         A memorial to the Congress of the United

  3         States, urging Congress to enact legislation

  4         designating the Florida Windstorm Underwriting

  5         Association and the Florida Residential

  6         Property and Casualty Joint Underwriting

  7         Association as tax-exempt entities under s.

  8         501(c) of the Internal Revenue Code.

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10         WHEREAS, in recent years, catastrophic storms have

11  caused great destruction of property, inflicting billions of

12  dollars of losses upon the residents of the State of Florida;

13  and

14         WHEREAS, the prospect of unsustainable catastrophic

15  losses in the foreseeable future has led many property

16  insurers in recent years to reduce their presence in Florida

17  or to restrict their growth in Florida, and

18         WHEREAS, as a result of these business decisions, a

19  property insurance availability crisis, in which large numbers

20  of residents and businesses have been unable to obtain needed

21  property insurance through the traditional "voluntary"

22  insurance market, arose in Florida soon after Hurricane Andrew

23  and continues to the present day, and

24         WHEREAS, Florida's continuing population growth creates

25  demand for an expanded property insurance market, and

26         WHEREAS, the Legislature has found that the inability

27  of the private sector insurance and reinsurance markets to

28  maintain sufficient capacity to enable residents of this state

29  to obtain property insurance coverage in the private sector

30  endangers the economy of the state and endangers the public

31  health, safety, and welfare, and

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CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1998                HM 4265

    114-272B-98






  1         WHEREAS, the State of Florida has employed a variety of

  2  means to alleviate the availability crisis, including the

  3  establishment of two residual market mechanisms to provide

  4  insurance coverage that is otherwise unvailable, the Florida

  5  Windstorm Underwriting Association and the Florida Residential

  6  Property and Casualty Joint Underwriting Association, and

  7         WHEREAS, the availability crisis persists more than 5

  8  years after Hurricane Andrew, as evidenced by the fact that,

  9  as of February 1, 1998, despite the takeover of a large number

10  of residual market policies by the voluntary market, the

11  Florida Windstorm Underwriting Association and the Florida

12  Residential Property and Casualty Joint Underwriting

13  Association have a combined total of more than 800,000

14  policies in force, representing approximately $120 billion in

15  exposure, and

16         WHEREAS, the State of Florida has provided that the

17  Florida Windstorm Underwriting Association and the Florida

18  Residential Property and Casualty Joint Underwriting

19  Association be operated on a not-for-profit basis, with no

20  possibility for private inurement, and for the exclusive

21  purpose of providing a public benefit; and

22         WHEREAS, because of their current federal tax status,

23  neither the Florida Windstorm Underwriting Association nor the

24  Florida Residential Property and Casualty Joint Underwriting

25  Association can accumulate needed funds on a tax-free basis

26  for use in future years when a major catastrophe occurs; and

27         WHEREAS, designating the Florida Windstorm Underwriting

28  Association and the Florida Residential Property and Casualty

29  Joint Underwriting Association as tax-exempt will help those

30  entities address the financial exigencies which could be

31  brought on by a catastrophic storm or other major perils by

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    Florida House of Representatives - 1998                HM 4265

    114-272B-98






  1  greatly enhancing their ability to accumulate needed funds;

  2  and

  3         WHEREAS, the Florida Windstorm Underwriting Association

  4  and the Florida Residential Property and Casualty Joint

  5  Underwriting merit inclusion under s. 501(c) of the Internal

  6  Revenue Code because they each meet the criteria generally

  7  posited for tax-exempt status, that is, promotion of a public

  8  benefit and prohibition of private inurement, NOW, THEREFORE,

  9

10  Be It Resolved by the Legislature of the State of Florida:

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12         That the Congress of the United States is respectfully

13  requested to act with all deliberate speed to enact

14  legislation designating the Florida Windstorm Underwriting

15  Association and the Florida Residential Property and Casualty

16  Joint Underwriting Association as tax-exempt entities under s.

17  501(c) of the Internal Revenue Code.

18         BE IT FURTHER RESOLVED that copies of this memorial be

19  dispatched to the President of the United States, to the

20  President of the United States Senate, to the Speaker of the

21  United States House of Representatives, and to each member of

22  the Florida delegation to the United States Congress.

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