Florida lawmakers approve surplus lines modernization provision

Insurance Business America | May 06, 2019

Florida lawmakers approve surplus lines modernization provision
The Florida legislature has approved House Bill 301 – a law that has a provision that would eliminate the prescriptive cap on surplus lines agent policy fees. As part of an effort to “modernize” the surplus lines market, the provision not only removes the cap on insurance agent fees, but also replaces the rule for new language which stipulates that fees should be reasonable and clearly listed on the policy. The legislation will not come into effect until it is signed by the governor. The bill shares some similarities with an earlier plan – HB 387 – which was proposed last February. In response to the Florida legislature’s approval of the bill, the Wholesale & Specialty Insurance Association (WSIA) has issued a statement praising the lawmaker’s decision. “We applaud the work of the Florida Surplus Lines Association (FSLA), and their partnership with WSIA and a number of industry leaders, to modernize the Florida surplus lines marketplace,” said WSIA president Joel Cavaness in a statement.

Spotlight

This paper seeks to explain high-level trends in the asset allocation of major life insurers across eight Asian markets over the last four years to 2015, using data collected from various regulatory and audited sources, enriched with subjective commentaries from market participants. This research aims to compare and contrast some aspects of these Asian markets with the United States. Unsurprisingly, the growth rates, product mixes, and investment markets vary across geographies, but one global theme is the current low level of interest rates. This leads to a fundamental challenge in sourcing long-term assets with decent yields and acceptable risks to back life insurance liabilities. Asian insurers can be heavily constrained in what and how much assets they can buy and by the lack of depth and breadth in their respective asset markets. As an example, in Taiwan, the entire government bond market is less than half the size of life insurance industry assets, which is usually not the case for developed markets such as the United States.

Spotlight

This paper seeks to explain high-level trends in the asset allocation of major life insurers across eight Asian markets over the last four years to 2015, using data collected from various regulatory and audited sources, enriched with subjective commentaries from market participants. This research aims to compare and contrast some aspects of these Asian markets with the United States. Unsurprisingly, the growth rates, product mixes, and investment markets vary across geographies, but one global theme is the current low level of interest rates. This leads to a fundamental challenge in sourcing long-term assets with decent yields and acceptable risks to back life insurance liabilities. Asian insurers can be heavily constrained in what and how much assets they can buy and by the lack of depth and breadth in their respective asset markets. As an example, in Taiwan, the entire government bond market is less than half the size of life insurance industry assets, which is usually not the case for developed markets such as the United States.

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