main menu page title feature menus content footer
My Florida C F O

CFO's Initiatives

Stay Connected

Follow the
Department of
Financial Services

Sign up for the CFO's
weekly newsletter!

Press Release

News   RSS RSS   Press Office   Archive

Gallagher Says Federal Ruling Significant for Florida Homeowners


TALLAHASSEE-Treasurer and Insurance Commissioner Tom Gallagher today hailed a federal judge's ruling that $172 million in federal income taxes paid by the state's insurer of last resort - the Florida Residential Property and Casualty Joint Underwriting Association - should not have been paid because it should be considered a tax-exempt entity by the Internal Revenue Service. Gallagher cited the ruling to bolster his argument for passing legislation he is proposing to merge Florida's two residual markets into one.

"Since the creation of the FRPCJUA following Hurricane Andrew, we have been working to obtain tax-exempt status from the IRS. This is great news for Florida's homeowners," Gallagher said. "Florida's other residual market - the Florida Windstorm Underwriting Association (FWUA) - has been unable to secure tax-exempt status because of its industry-dominated governance structure. With the Legislature in session, now is the time to streamline our state's dueling residual markets and take advantage of the tax savings."

The $172 million in taxes refunded back to the FRPCJUA would be added to the entity's surplus and available to help pay claims in the event a catastrophic storm hit Florida. "It also means less of an assessment for Florida's homeowners after a storm," Gallagher said.

The FRPCJUA currently has approximately 110,000 policyholders, with a majority of those policyholders in south Florida. In contrast, FWUA provides coverage to about 410,000 coastal residents, more than 65 percent of which are in south Florida.

Senator Rudy Garcia (R-Dade) and Representative Jeff Atwater (R-Palm Beach) are sponsoring Gallagher's plan to combine the FRPCJUA and the FWUA into one entity called Citizens Property Insurance Corporation. Under the legislation, the entity is structured to be tax-exempt and eligible to issue tax-free bonds.

Please contact Justin Glover at 850-413-2842 to request copies of the ruling by Judge Roger Vinson.