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Gallagher Recommends Extending Moratorium on Cancellations to Homeowners Still Waiting for Repairs

11/9/2004

CONTACT: Tami Torres
(850) 413-2842
 
TALLAHASSEE—At a meeting of Florida's governor and Cabinet today, state Chief Financial Officer Tom Gallagher recommended extending the current moratorium on insurance non-renewals or cancellations for hurricane victims whose homes have yet to be repaired. 
 
"Homeowners who lose their insurance coverage before repairs are complete are uninsurable," said Gallagher.  "For the thousands of hurricane victims who are still waiting for repairs, extending the moratorium on non-renewals and cancellations gives them peace of mind as they rebuild their homes and lives."
 
Recognizing that many homeowners are being told they must wait up to six months to schedule repairs due to a shortage of construction contractors, Gallagher has asked the Office of Insurance Regulation to develop an emergency rule prohibiting insurance companies from canceling or non-renewing homeowners insurance coverage until repairs are complete.  The rule would be considered at the next scheduled Cabinet meeting, Nov. 23. 
 
Gallagher said this issue may require legislation but wanted an emergency rule to be drafted in anticipation of approval by the governor and Cabinet at their next meeting.
 
Gallagher also announced today that he has issued an investigative subpoena against New York-based Marsh & McClennan, one of the nation's largest insurance brokerages.  The subpoena requests documents related to the purchase of property insurance coverage for state-owned buildings. 
 
"While we are currently investigating potential abuses in the insurance industry to protect Florida's consumers, we are now taking a deeper look at insurance contracts with state agencies and any impact on public dollars," Gallagher said.  "We will not tolerate any abuse of tax dollars."

Gallagher announced a broader look at the insurance industry as a whole last week, establishing a legal task force to investigate whether any of the activities outlined in New York Attorney General Eliot Spitzer's recent civil suit are taking place among insurance brokerages and companies in Florida, including bid-rigging, kickbacks and improper fees.  Spitzer's suit alleges civil and criminal misconduct involving insurance brokers steering business to insurance companies for a commission.