Fla. loosens rules on backup storm insurance

TALLAHASSEE, Fla. (AP) -- Florida is loosening up its rules on the sale of backup hurricane insurance by foreign companies, in the hopes of eventually lowering premium rates for consumers -- even though that's unlikely in the short term.

Gov. Charlie Crist and the state Cabinet approved implementing a new law that lets Insurance Commissioner Kevin McCarty lift or modify collateral requirements on reinsurance.

That's insurance for insurance companies. Domestic sellers don't have to put up any collateral while foreign firms must post 100 percent collateral.

That requirement has been cited as a barrier to greater investment in the state's insurance market. The rules will let McCarty reduce that requirement on a case-by-case basis for foreign reinsurers.

Reinsurance is one of several components to go into rates paid by homeowners. It covers catastrophic losses that exceed what an insurance company could pay out on its own.

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