The Florida Legislature, in the closing hours of its 2006session, has approved two measures aimed at bolstering smallproperty insurers.

The provisions were incorporated in an omnibus propertyinsurance reform bill approved Friday night.

One measure would allow greater access to the Florida InsuranceCatastrophe Fund for so-called limited apportionment companies(LACs) with $25 million in surplus or less. It enables them to buya $10 million layer of coverage for each of two hurricanes aboveretention of 30 percent of the company's surplus at a rate of 50percent of coverage selected for one year only.

The bill also requires a 25 percent rapid cash buildup factor inthe premiums paid by insurers for coverage from the FICF.

Sam Miller, executive vice president of the Florida InsuranceCouncil trade group, said an amendment failed that would havefinalized LAC status for several smaller companies.

“This has left several small companies unhappy and facingprivate reinsurance issues,” he said.

Another amendment failed that would have extended the right tolarger companies, he noted.

“Many of these companies, however, will benefit from the capitalsurplus note loan program in the final bill,” Mr. Miller said.

That bill will provide funding in the form of “surplus notes” tonew or existing authorized residential property insurers with thefollowing conditions:

o The amount of the surplus may not exceed $25 million, or 20percent of total funds available to the program.

o The combination of surplus, new capital and surplus noted mustbe at least $50 million.

o The surplus noted must be repayable to the state with a20-year term at the 10-year Treasury Bond interest rate.

The actions have come in the aftermath of the state takeover oftwo of three companies within the Poe group, based in Tampa, andconcerns by lawmakers of property insurance capacity issues as thebig companies restrict coverage.