State Insurance Commissioner Kevin McCarty signed off on the association's latest 2 percent assessment Monday, said Tom Zutell, spokesman for the state Office of Insurance Regulation.
Insurers are expected to begin imposing the one-time surcharge, which is the association's third in 15 months, around March, as policies renew. It is expected to raise $315 million to help pay claims for Poe and for Vanguard, another small insurer that failed, said Sandra Robinson, the association's executive director.
Every homeowner policy and commercial and liability policy in Florida will be charged, she said, as well as every medical malpractice and aircraft policy. Policyholders of Citizens, the state-sponsored insurer of last resort, will be hit this time because the legislature removed their exemption from such assessments as part of the insurance reform passed in January.
The new surcharge, which will add $20 to every $1,000 in premiums, serves as a reminder of how extensive the property damage was from the eight hurricanes that pounded nearly every corner of the state in 2004 and 2005.
Although Florida has gone without a major storm the past two hurricane seasons, insurance rates have doubled and tripled for many policyholders. Lawmakers' efforts to lessen costs for insurers have resulted in mostly small rate decreases.
Moreover, surcharges to help shore up Citizens and the Florida Hurricane Catastrophe Fund, which sells backup reinsurance to insurers, have only added to increaes for policyholders. Citizens and the catastrophe fund currently have multi-year assessments in place.
The Florida Insurance Guaranty Association approved its newest assessment Oct. 11 after concluding that the Poe failures would add up to $750 million, Robinson said.
The cost of the Poe failure will be $1.36 billion, Robinson said. But the association, which pays failed insurers' claims, will recover about $650 million from reinsurance, she said.
The three Tampa-based Poe companies had insured more than 300,000 policyholders, the largest concentration in the area of Palm Beach, Broward and Miami-Dade counties.