NU Online News Service, May 23, 2:56 p.m.EDT

The property-insurance reform bill recently signed in Florida will helpimprove insurers' bottom lines, but large homeowners insurers areunlikely to expand their presence in the state due to continuedcompetition from the insurer of last resort, according toMoody's.

The bill, SB 408, is credit-positive for insurers, says Moody's,adding that provisions addressing hurricane and sinkhole claims andallowing insurers to increase rates by 15 percent a year instead of10 percent will help insurers' profitability in a state known for a"difficult regulatory environment."

Moody's says 10 of the top 20 Florida homeowners insurers have84-100 percent concentrations in the homeowners line "and thereforewill benefit from the law's implementation, which is effectiveimmediately."

Still, Moody's says, "we think [Citizens Property InsuranceCorp., the state's last-resort insurer,] will continue to competewith the private-insurance market to such an extent that largehomeowners-insurance carriers are unlikely to expand their presencein the state."

According to a chart accompanying Moody's analysis in its WeeklyCredit Outlook, Citizens held a 28.9 percent share of thehomeowners market as of 2010, leading all insurers in thestate.

"Profitability for Florida homeowners insurers has been underpressure over the past several years," says Moody's. "The state isa peak U.S. catastrophe zone, and many large insurers have reducedtheir market share or exited the Florida property-insurance marketover the past six years, with [Citizens] and smaller, privateinsurers assuming the risk."