Florida's new insurance reforms will make state carriers with large property catastrophe exposures there the most vulnerable to negative rating actions, rating firm A.M. Best Co. said.
The Oldwick, N.J.-based firm said the impact of the reform measure on the reinsurance sector may be limited to an overall price softening as the legislation encourages an exit from the Florida market of reinsurers who must look for new places to deploy capital.
Under the new law, primary insurers can buy reinsurance from the state's Hurricane Catastrophe Trust fund at a reduced cost--provided their savings on that expense are passed directly to consumers.
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