The Financial Services Commission and the Office of Insurance Regulation (“Office”) hereby state that the following circumstances constitute an immediate danger to the public health, safety, or welfare: The residential property insurance market in Florida is in crisis. Property insurance rates are at the highest levels in Florida history. The multiple hurricanes and tropical storms of the past several years (which resulted collectively in more than an estimated $36 billion in insured losses) coupled with the actions and reactions of certain private insurers have created and fueled this crisis. Additionally, many insurers have in the recent past engaged in a widespread pattern of policy cancellations and non-renewals. These factors have limited significantly the availability and affordability of residential property insurance and have dramatically increased the cost of such insurance. The turmoil in the residential property insurance market has affected not only homeowners, but also the real estate and construction market. Homeowners in Florida, especially those located in the proximity of the coast, are finding it extremely difficult to find an adequate level of residential property insurance coverage at affordable rates. Thousands of Florida citizens voiced to the Governor, members of the Cabinet, and the Legislature the hardships faced as a result of the current insurance crisis. Some property owners have been unable to sell real property because prospective buyers cannot obtain the required insurance at affordable prices, while others have found that the inability to find affordable residential property insurance has resulted in their mortgage companies threatening to “force place” wind/hail coverage or foreclose on their mortgages. The impact of skyrocketing residential property insurance rates has also seriously affected thousands of Florida’s most vulnerable residents who are on fixed incomes and cannot afford to purchase residential property insurance to protect their homesteads and personal property. Considering all of the foregoing, resolution of the current crisis is essential to the adequate protection of the public health, safety and welfare. In response to this crisis, the Legislature passed, and the Governor has signed, House Bill CS/HB 1A. In enacting this new law, and in recognition of the current crisis in the property insurance marketplace, the Legislature found as follows: A. WHEREAS, Homeowners in the State of Florida are struggling under increased insurance costs and increased housing prices as a result of damage caused by hurricanes and tropical storms, and B. WHEREAS, This increase in the cost of property insurance for the state’s residents demands immediate attention, and C. WHEREAS, The affordability of property insurance creates financial burdens for Florida’s residents and financial crises for some property owners, and D. WHEREAS, In addition to affordability, the availability and stability of property insurance rates are critical issues to the residents of this state, and E. WHEREAS, Because there is no single, quick, or easy solution to the current crisis, a comprehensive and creative approach is required, and F. WHEREAS, Property insurance is so interwoven with other forms of insurance, through business, regulation, advocacy, purchasing, and other interactions, that the viability of the insurance market in Florida is at risk, and G. WHEREAS, Expanding coverage offered by the Florida Hurricane Catastrophe Fund can help to address this crisis, and H. WHEREAS, Taking steps to control or reduce the premiums charged by Citizens Property Insurance Corporation can help to address this crisis, and I. WHEREAS, Strengthening the processes for establishing property insurance rates can help to address this crisis, and J. WHEREAS, The role of consumer advocacy is a critical part of addressing this crisis and consumer advocacy for property insurance is a critical, if not the predominant, part of consumer advocacy regarding insurance, and K. WHEREAS, Promoting, through financial and regulatory methods, the ability of property insurers and reinsurers to do business in Florida can help to address this crisis, and L. WHEREAS, Promoting, through financial and regulatory incentives for property owners, the strengthening of property to withstand the effects of windstorm damage can help to address this crisis. These specific findings establish the Legislature not only recognized the current crisis, but also took specific action to resolve that crisis. CS/HB 1A thus represents the path forward out of the existing crisis and towards a stable, affordable property insurance marketplace. The new law implements major reforms and provides for significant revisions to current law intended to provide for the reduction and stabilization of rates in Florida’s residential property insurance market as well as to address specifically the above described property insurance affordability and availability crisis. Section 3 of CS/HB 1A requires every residential property insurer to make a rate filing pursuant to the “file and use” provisions of s. 627.062(2)(a)1, Florida Statutes, which reflects the savings or reductions in loss exposure due to Section 2 of the Act. Prior to such filing, the Office must calculate a presumed rate reduction factor. Furthermore, Section 3 of the Act recognizes the critical importance of implementing rate decreases as soon as practicable. House Bill CS/HB 1A provides for an aggressive schedule of analysis, implementation, and development of a presumed factor for application of the savings that the provision of Section 2 of the act will provide to the consumer. These substantial reforms and revisions will alter the competitive dynamic in the property insurance market and provide meaningful rate relief to Florida’s policyholders. The new law has the purpose and effect of addressing the property insurance crisis in a significant way and will impact directly the availability of affordable property insurance. However, these reforms and revisions will require time before implementation. Therefore, in the interim, to allow any rate filings that do not incorporate the criteria and standards set forth in the new law frustrates the Legislative purpose and intent and threatens the public health, safety and welfare by further deepening the property insurance crisis. Moreover, to permit insurers, at this fragile stage, to continue the pattern of widespread cancellations and non-renewals, which result in the circumvention of the new law, will further destabilize the market and further limit the availability of affordable residential property insurance thus deepening the current crisis. As the 2007 Hurricane season approaches, it is essential that property insurance become and remain both more available and more affordable. The immediate protection of the public welfare thus requires emergency action as set forth herein. Such action will stabilize the market, prevent further deepening of the existing crisis, and eliminate the possibility for rate increases while not unduly impairing the ability of insurers to continue to conduct business.