Florida Gov. Ron DeSantis signed a bill reducing available funds for the state’s Reinsurance to Assist Policyholders program by $1.1 bn and eliminating the dormant Florida Optional Reinsurance Assistance program.
House Bill 5013, chaptered on July 3, lowered funding for the RAP program from $2 bn to $900 mn. RAP reimburses participating carriers for hurricane-related losses.
Created in 2022, the program allocated $2 bn in tax money to expand capacity for the Florida Hurricane Catastrophe Fund. In return, participating carriers agreed to reduce rates.
However, RAP outlays never reached the funding level earmarked for the program. Between 2022 and 2023, three covered events occurred, but only Hurricane Ian was significant enough to trigger RAP coverage.
Following Ian in 2022, $800 mn was transferred into the program, and 48 insurers were reimbursed a total of $740.6 mn as of Dec. 31, 2024.
The SBA estimated up to 50 companies would receive payments, totaling less than $860 mn. Carriers have until June 1, 2028, to request reimbursement.
Hurricane Nicole, which also struck Florida in 2022, had no impact on the program. Hurricane Idalia in 2023 led to $15 mn being transferred into the fund, with two insurers reimbursed a total of $5.5 mn to cover Idalia losses as of Dec. 31, 2024.
The new law also repeals sections of Florida’s statute covering the FORA program, created during a December 2022 special session and allocated up to $1 bn in general funds.
The State Board of Administration, which administered FORA, stated that although the program operated during the 2023 hurricane season, it effectively ended that year as it was intended as a one-year program.
During its operation, FORA attracted only five participating carriers and recorded minimal losses after Idalia.
No losses exceeded carriers’ retention levels, all participating insurers canceled their contracts, and the program no longer has any liabilities.
