Florida has slashed its hurricane reinsurance funding, leaving insurers with fewer financial safety nets when disaster strikes.
Under House Bill 5013, the state’s backing for hurricane-related reinsurance took a major cut. The law lowers the cumulative transfer limit from the General Revenue Fund for the Reinsurance to Assist Policyholders (RAP) program – shrinking it from $2 billion to $900 million.
What does that mean for the industry? Put simply, insurers will have a lot less public money to rely on after major storms. The RAP program was designed to help carriers recover from hurricane losses by providing state-backed financial support. But with the cap now cut by more than half, insurers will need to rethink how they manage catastrophe risk.
The law also repeals the Florida Optional Reinsurance Assistance (FORA) program, closing the door on a state-backed reinsurance option that was authorized but largely unused. FORA was created as an extra layer of support for insurers, but it never became a major part of the state’s reinsurance framework.
These changes reduce the state’s financial commitment for hurricane losses, meaning insurers will shoulder more of the risk. That could drive greater reliance on private reinsurance markets – and potentially higher costs in an already challenging environment.
Insurance professionals will need to pay close attention as storm season progresses. The loss of state-backed support could change how carriers structure their reinsurance programs, price policies, and plan for the next big one.
