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

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

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

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

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

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

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

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

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

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

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

o The surplus noted must be repayable to the state with a 20-year term at the 10-year Treasury Bond interest rate.

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

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