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October 26, 2010

Contact:  Sam Miller, Florida Insurance Council Executive Vice President, 850-386-6668 x 223


TALLAHASSEE – Cecil Pearce, president of the Florida Insurance Council (FIC), the state’s largest company trade association, today addressed concerns about misinformation stated in articles published in the Sarasota Herald Tribune, Lakeland Ledger, Gainesville Sun and Ocala Star-Banner.

“As an organization that strives to educate the media, consumers and public on the business of insurance, the Florida Insurance Council believes it is important to address the recently published articles in some of Florida’s major newspapers.  The articles, which focused solely on the cost of reinsurance, grossly misrepresented an industry that the companies we represent and Floridians throughout the state depend on.

“While the idea of reinsurance and how it works is somewhat complicated, in simplest terms, it is insurance for insurance companies.  Reinsurance enables insurance companies to offer more coverage than it could otherwise by limiting an insurer’s loss exposure to levels commensurate with its assets, stabilizes an insurance company’s operating results by reducing significant fluctuations in loss experience and allows companies to spread catastrophic losses around the world.

“While reinsurance is of intense interest to our members, it is not the cause of the challenges that continue to beset Florida’s consumers and insurers.  The key challenges in today’s insurance market are the ongoing sinkhole crisis, and issues such as the abusive practices of certain 'public adjusters,' the lack of a level playing field for bad faith, mitigation inspection fraud, the current requirement to pay replacement costs without regard to whether the work has been or ever will be done or the item replaced, and abuses of our current rules on stale claims.

“Florida’s hurricane exposure can not be wished away.  Nor should it be blamed on others.  However, it can be dealt with  - if we begin to understand the problem more clearly.   FIC will continue educating and arming the public with factual information and serving as a constant source for background on all insurance-related issues throughout the state.”